GREATER MANCHESTER FIRE AND RESCUE AUTHORITY
FINANCIAL STATEMENTS
2014/15
CONTENTS
Introductory Statements
Introduction to the Statement of Accounts by the Chairman
Explanatory Foreword by the Treasurer
PAGE
3
4
Core Financial Statements
Movement in Reserves Statement
Comprehensive Income and Expenditure Statement
Balance Sheet
Cash Flow Statement
Notes to the Core Financial Statements
9
10
11
12
13
Other Financial Statements
Pension Fund Account
Notes to the Pension Fund Account
66
67
Governance and Audit
Statement of Responsibilities for the Statement of Accounts
68
Non Financial Statements
Sustainability Accounting and Reporting
69
Additional Information
Glossary
Terms of Reference
74
78
INTRODUCTION TO THE STATEMENT OF ACCOUNTS
Greater Manchester Fire and Rescue Authority is one of the largest fire services in the country,
covering an area of approximately 496 square miles, with a population of over 2.5million people.
Within that area we have 41 fire stations which are organised into 5 areas, each with an Area
Office.
Around 2,100 people work in the Service split between Operational staff and support services
including finance, property/fleet management, Human Resources and Information Technology.
Our Fire Fighters key role is still to respond to emergencies but they also spend time promoting
fire safety within the community. Around 60,000 Home Safety Checks are carried out each year.
Our aim is to have at least one working smoke alarm in every home in Greater Manchester.
I am pleased to introduce the Statement of Accounts for the Authority for 2014/15. A surplus of
£0.261m has been achieved which helps maintain a sufficient level of balances. Balances are
integral to the Authority’s financial plans as they provide long term stability to assist with budget
planning and the capital programme. It is also part of my role to ensure that the Authority makes
the most of its resources in order to deliver a value for money service for the people of Greater
Manchester. Despite cuts to the budget we have achieved our savings targets and continued with
our excellent record of delivering efficiencies whilst still attaining some significant successes
against our wider aims and outcomes in the last 12 months including:




An average response time of less than 6 minutes
Helping young people gain over 1700 recognised qualifications
The recruitment and deployment of 443 volunteers providing 57,000 hours service
A reduction in false alarms attended of 16%
The installation of solar panels which generate enough electricity for 8 fire stations.
As the Government is continuing to address the budget deficit it is essential that the Authority
continues to plan for the longer term whilst further transforming itself in order to meet future
reductions in funding. The Service’s core purpose is still to protect and improve the quality of life
of the residents of Greater Manchester.
Councillor David Acton
Chairman of Greater Manchester Fire and Rescue Authority
Councillor David Acton
3
EXPLANATORY FOREWORD BY THE TREASURER
1. Introduction
I am pleased to introduce to you the Statement of Accounts for the Authority for 2014/15. The
purpose of this foreword is to present the financial results of the Authority’s activities for the year
and to provide details of the changes and challenges that the Authority faces.
The financial statements provided within the accounts show that the Authority has sound financial
management processes and takes the stewardship of public funds extremely seriously. The
statements show that the financial standing of the Authority is robust and is in a strong position to
meet future challenges.
We are required by law to complete our accounts in accordance with the requirements of the Code
of Practice on Local Authority Accounting based on International Financial Reporting Standards
(IFRS) for 2014/15, Accounting Codes of Practice published by the Chartered Institute of Public
Finance and Accountancy (CIPFA) and any other government legislation or regulations. The
guidance ensures that the accounts of different authorities can be compared with each other. It
tells us how the figures need to be prepared and the definition of services to be included under the
main headings. The overriding requirement of the Code of Practice is that the Statement of
Accounts ‘presents a true and fair view’ of the financial position and transactions of the Authority.
The accounts that follow this foreword are highly technical and inevitably include some technical
language. Wherever possible this has been avoided in an attempt to provide the reader with an
easily understandable guide to the most significant matters reported in the accounts. A glossary is
provided at the back of the publication to explain some of the technical terms.
2. Review of the financial year
The Authority set its budget for 2014/15 in February 2014. Along with efficiency savings the
budget also included a contribution from balances towards the development of the Bury Practical
Training Site, which will become a specialised training facility for the fire service, ensuring that all
potential scenarios are fully practiced and rehearsed.
The outturn for 2014/15 shows an underspend of £0.261m will be added to balances. This surplus
means that the efficiency targets have been met and delivered in year providing an opportunity to
earmark future monies in reserves which can be utilised in the future to assist in the
transformation of the service as austerity continues.
As Treasurer to the Authority I need to ensure that balances are adequate and are available to
meet the future challenges. The 2014/15 accounts provide me with further evidence that the
current strategy of maintaining the level of balances, whilst providing support to initiatives and
acting as a hedge against future precept rises is a sound approach and further emphasises the
value for money that the Authority provides.
3. Where the Authority received its money from and how it was spent
The following diagrams show a high level picture of where the Authority gets its money from and
how it spends that money.
4
Where the money came from
3%
25%
NNDR
38%
Precepts
Government Grants
Rents, Charges, Interest etc
34%
The Authority receives Revenue Support Grant and an allocation of Business Rates “Top Up”
directly from Central Government. It levies a precept on the ten Greater Manchester District
Authorities for the balance of its expenditure requirements. The precept levied for 2014/15
excluding the surplus on collection fund was £39.042m which equated to a Council Tax Band D
equivalent of £57.64.
What the money was spent on
5%
Salaries and Wages
22%
Pensions
Running Expenses
11%
62%
Capital Financing
Charges
5
4.
Capital Expenditure and Financing
The Authority also operates a capital programme. The Capital Programme is a 4 year plan of our
future spending on assets including land, buildings and vehicles. In 2014/15 £4.7m was spent on
capital schemes and was fully funded from government grants and contributions from earmarked
reserves (that have been built up over a number of years).
A summary of the capital programme spending in 2014/15 is provided in the table below:
2013/14
Project
£’m
2014/15
£’m
2.301
2.269
2.587
0.544
0.494
Equipment
Building Improvements
Fire Stations / Major Builds / Refurbishments
General Vehicles
Information Technology
2.579
0.768
0.533
0.411
0.401
8.195
Total Capital Expenditure
4.692
The most significant items of expenditure in future years relate to the development of the Bury
practical training centre and a new build multipurpose premises at Wigan.
As part of the development of a capital programme the Authority needs to ensure that sufficient
funds are available and the programme remains in balance. During recent years this position has
been maintained by using reserves set aside for this purpose.
The long term future of the capital programme will be dependent upon the availability of reserves
to support the programme, grant funding made available by the Government, receipts from the
sale of land and buildings and borrowing. There are cost implications associated with borrowing
and this would only take place if sufficient revenue budget was available to repay the debt.
Borrowing Facilities
Traditionally any approved borrowing of the Authority would have been secured via the Public
Works Loans Board (PWLB). The PWLB offers borrowing at rates only slightly above the rates at
which the Government secures its debt. The current level of PWLB has reduced by £4m during
2014/15 as historic loans have become due for repayment. These repayments have been
managed from internal cash resources and therefore there has been no need to replace them.
As a result, the level of PWLB debt held by the Authority now stands at £0.700m. In addition to
the PWLB debt the Authority is also liable for its share of the former Greater Manchester County
GMC debt, which is administered by Tameside Council. At 31 March 2015 this debt was £3.736m
As part of the regulatory frameworks that must be followed the Authority must calculate a capital
financing requirement which is defined as the measure of the underlying need to borrow to finance
capital expenditure. This figure has been calculated at £36.811m for 2014/15.
5. Other Matters
In 2013/14 the Government transferred the responsibility for the Collection of Business rates to
Local Councils. The Authority as part of its budget receives the equivalent of 1% business rates
collected from each of the Greater Manchester Councils. There is significant volatility in the level
of business rates in particular due to the impact of appeals against rating decisions. It is becoming
apparent that there has been a significant increase in the number of appeals lodged. As the
Authority takes its share of any surplus and deficits of the GM Councils in business rates then an
6
increase in successful appeals will have an adverse impact on the Authority’s finances. The
position on appeals will be considered as part of the budget strategy. It has been proposed to
take a prudent approach and set aside £1.5m in a reserve to meet future potential liabilities.
Fire Control
The Authority together with Cheshire, Cumbria and Lancashire Fire and Rescue Authorities in
conjunction with the Department for Communities and Local Government collaborated to create a
regional control centre. In 2014/15 the Centre became operational and is managed by the NW
Fire Control Ltd, which is a Local Authority controlled company governed by a Board of Directors
made up of Councillors from each Fire Authority. Full details of the company and the service
provided is included as a note to the accounts.
6. Pension Fund Account
The Accounts also include a separate statement on the Fire Fighters Pension Fund. The
maintenance of a Pension Fund account is required under legislation and the accounting code of
practice. The Pension Fund is where the costs of pension paid out to individuals and the
contributions made by employees and employers is recorded. The current pension scheme
arrangements ensure that any shortfall between pensions paid out and contributions received is
met by the Department for Communities and Local Government.
The Pension fund only relates to the Fire Fighters pension scheme whereas any pensions relating
to the Local Government Pension Scheme are included within the main body of the accounts.
7. Medium Term Financial Strategy Outlook
The Authority continues to plan within a longer term horizon as all indications are that we are only
halfway through the national austerity programme. Given these national economic forecasts the
Authority aims to introduce changes in a measured way. The Medium Term Financial Strategy
(MTFS) covers a three year period so that Members of the Authority can appreciate the potential
consequences of funding decisions in the future. The MTFS is developed in line with the
Authority’s Corporate Plan which identifies the Authority’s purpose and aims and examines the
emerging opportunities and threats facing the Service.
The plan outlines our strategic direction for the next three years and in particular how we aim to
change our approach to consultation and ensure it is being undertaken proportionately and with
relevance to local people as we transform the Service. As part of our transformation we need to
work more closely with other public services and expand our collaborative agenda by developing
closer links with the Greater Manchester Combined Authority and local Councils as we look
towards the integration of the blue light service.
As a result of extending our collaborative activity funding has been secured from the Government
to create a Community Risk Intervention Team (CRIT) which is being led by ourselves. CRIT
consists of representatives from the Greater Manchester Fire and Rescue Service, North West
Ambulance Service, Greater Manchester Police, Director of Public Health, Clinical Commissioning
Groups and Health and Social Care providers within Local Councils. The development of CRIT
offers a prime opportunity to provide a more cost effective response to high volume low priority
incidents and expand prevention activities thus reducing demand and deliver further efficiencies.
8.
Concluding Remarks
As the Authority transforms it is expected that as chief financial officer that I ensure that the
budget and precept are appropriate and that a prudent level of reserves and balances are
available to ensure the delivery of future plans are achievable.
7
The financial statements provide assurance to the reader that the Authority’s financial position is
robust and that its pro-active approach to the impact of the austerity measures has delivered the
necessary savings in advance thus providing a one off opportunity to set monies aside into
reserves which will be utilised to support the service as it transforms.
The preparation of these statutory accounts to a high standard is a testament to the finance staff
who have contributed to the completion of this statement and I would like to take the opportunity to
pass on my thanks for this considerable achievement.
Core Financial Statements
Movement In Reserves Statement.
The Movement in Reserves Statement shows the movement in year on the different reserves held
by the Authority, analysed into “usable reserves” (those that can be applied to fund expenditure or
reduce taxation) and other reserves. The Surplus or (Defict) on the provision of services line
shows the true economic cost of providing the Authority’s services, which is shown in more detail
in the Comprehensive Income and Expenditure Statement.
The Comprehensive Income and Expenditure Statement
The Comprehensive Income and Expenditure Statement for 2014/15 shows the accounting cost in
year of providing services in accordance with International Financial Reporting Standards rather
than the amount funded from taxation. The taxation position is contained within the movement in
reserves statement.
The Balance Sheet
The Balance Sheet shows the value as at 31 March 2015 of the assets and liabilities recognised
by the Authority. The net liabilities of the Authority (assets less liabilities) are matched by the
reserves held by the Authority. Reserves are held in two categories ie Usable reserves (those that
are available to use to deliver the service). The second category of reserves are those that the
Authority is not able to use to provide services (for example the Revaluation Reserve).
The Cash Flow
The Cash Flow Statement summarises the total movement of cash and cash equivalents during
2014/15. The statement shows how the Authority uses cash and cash equivalents by classifying
cash as operating, investing and financing activities.
The Pension Fund Account
The Pension Fund Account summarises the movements relating to the firefighters’ pension
scheme. This statement shows the costs of pensions for uniformed staff.
The cost of the Firefighters pensions is funded by contributions from employees and employers
with the balance being funded by the Government.
Paul McKevitt BA (Hons), ACMA & CGMA
Treasurer to the Authority
24 September 2015
8
MOVEMENT IN RESERVES STATEMENT
This Statement shows the movement in year on the different reserves held by the Authority,
analysed into ‘Usable Reserves’ (ie those that can be applied to fund expenditure or reduce
taxation) and other reserves. The ‘Surplus or (-) Deficit on the provision of services’ line shows
the true economic cost of providing the authority’s services, more details of which are shown in the
Comprehensive Income and Expenditure Statement. This is different from the statutory amounts
required to be charged to the General Fund Balance for Precept setting purposes. The ‘Net
Increase/Decrease before transfers to Earmarked Reserves’ line shows the statutory General
Fund Balance before discretionary transfers to Earmarked Reserves undertaken by the Authority.
Note General Earmarked Capital
Total
Fund
General
Grants
Usable
Balance
Fund
Unapplied Reserves
£’m
£’m
£’m
£’m
Balance at 31 March 2013
Unusable
Reserves
£’m
Total
Authority
Reserves
£’m
17.638
28.778
2.233
48.649
-1,456.645
-1,407.996
Surplus or deficit(-) on provision of
services (accounting basis)
-49.524
-
-
-49.524
-
-49.524
Other Comprehensive Income and
Expenditure
-
-
-
0.000
77.986
77.986
-49.524
0.000
0.000
-49.524
77.986
28.462
49.777
-
-1.441
48.336
-48.336
0.000
Net Increase or Decrease before
Transfers to Earmarked Reserves
0.253
0.00
-1.441
-1.188
29.650
28.462
Transfers to or from Earmarked Reserves 20
1.267
-1.267
-
0.000
-
0.000
Increase or Decrease in Year
1.520
-1.267
-1.441
-1.188
29.650
28.462
19.158
27.511
0.792
47.461
-1,426.995
-1,379.534
Surplus or deficit(-) on provision of
services (accounting basis)
-39.235
-
-
-39.235
-
-39.235
Other Comprehensive Income and
Expenditure
-
-
-
0.000
-83.198
-83.198
-39.235
0.000
0.000
-39.235
-83.198
-122.432
44.389
-
-0.772
43.617
-43.617
0.000
5.154
0.000
-0.772
4.382
-126.814
-122.432
Transfers to or from Earmarked Reserves 20
-8.696
8.696
-
0.000
-
0.000
Increase or Decrease in Year
-3.542
8.696
-0.772
4.382
-126.814
-122.432
15.615
36.208
0.020
51.843
-1,553.809
-1,501.966
Movement in reserves during 2013/14
Total Comprehensive Income and
Expenditure
Adjustments between accounting basis
and funding basis under regulations
Balance at 31 March 2014
6
20 &
21
Movement in reserves during 2014/15
Total Comprehensive Income and
Expenditure
Adjustments between accounting basis
and funding basis under regulations
6
Net Increase or Decrease before
Transfers to Earmarked Reserves
Balance at 31 March 2015
20 &
21
9
COMPREHENSIVE INCOME AND EXPENDITURE STATEMENT
This statement shows the accounting cost in the year of providing services in accordance with
generally accepted accounting practices, rather than the amount to be funded from taxation.
Authorities raise taxation to cover expenditure in accordance with regulations; this may be
different from the accounting cost. The taxation position is shown in the Movement in Reserves
Statement.
2013/14
2013/14
2013/14
Gross
Gross
Net
Expenditure Income Expenditure
£'m
£'m
Notes
£'m
2014/15
2014/15
2014/15
Gross
Gross
Net
Expenditure Income Expenditure
£'m
21.061
85.298
0.112
0.938
14.081
0.074
20.123
71.217
0.038
0.641
-
0.641
-
-
-
107.112
15.093
92.019
0.007
0.035
-0.028
74.092
3.505
70.587
-
113.054
-113.054
181.211
131.687
49.524
-5.462
-72.524
-77.986
-28.462
Community Safety
Fire Fighting and Rescue Operations
Fire Service Emergency Planning
Corporate and Democratic Core
Non Distributed Cost
Cost of Services
Other Operating Income(-) and
Expenditure
Financing and Investment Income and
Expenditure
Taxation and Non-Specific Grant
Income
7
8
9
Surplus(-) or Deficit on Provision of
Services
Surplus(-) or deficit on revaluation of
non-current assets
Re-measurement of the net defined
liability/(asset)
Other Comprehensive Income(-) and
Expenditure
Total Comprehensive Income(-) and
Expenditure
£'m
£'m
16.835
77.359
0.356
0.926
10.239
0.058
15.909
67.120
0.298
0.553
-
0.553
0.429
-
0.429
95.531
11.223
84.309
0.026
0.027
-0.001
68.233
3.514
64.718
-
109.792
-109.792
163.790
124.556
39.235
-4.320
35
87.518
83.198
122.432
I certify that the Comprehensive Income and Expenditure Statement presents a true and fair view
of the financial position of Greater Manchester Fire and Rescue Authority for the year ended 31
March 2015.
P McKevitt BA (Hons), ACMA & CGMA
Treasurer to the Authority
24 September 2015
10
BALANCE SHEET AT 31 MARCH 2015
The Balance Sheet shows the value as at the Balance Sheet date of the assets and liabilities
recognised by the authority. The net liabilities of the authority (assets less liabilities) are matched
by the reserves held by the Authority. Reserves are reported in two categories. The first category
of reserves are usable reserves, ie those reserves that the authority may use to provide services,
subject to the need to maintain a prudent level of reserves and any statutory limitations on their
use (for example the Capital Receipts Reserve that may only be used to fund capital expenditure
or repay debt). The second category of reserves are those that the authority is not able to use to
provide services. This category of reserves includes reserves that hold unrealised gains and
losses (for example the Revaluation Reserve), where amounts would only become available to
provide services if the assets are sold; and reserves that hold timing differences shown in the
Movement in Reserves Statement line ‘Adjustments between accounting basis and funding basis
under regulations’.
At 31 March
2014
£’m
Note
At 31 March
2015
£’m
63.553
12.938
0.169
0.378
0.496
77.534
Property, Plant & Equipment
Other Land and Buildings
Vehicles, Plant & Equipment
Assets under Construction
Surplus Assets
Investment Property
Intangible Assets
Long Term Assets
18.491
0.203
1.039
5.724
8.041
33.498
Cash and Cash Equivalents
Assets Held for Sale
Inventories and Work in Progress
Short Term Debtors
Amount due from Pension Fund
Current Assets
17
11
15
16
20.321
0.851
9.230
6.535
36.937
4.000
12.872
1.048
17.920
Short Term Borrowing
Short Term Creditors
Short Term Provisions
Current Liabilities
14
18
19
12.203
2.269
14.472
Long Term Provisions
Long Term Borrowing
Long Term Liability - Pension Scheme
Long Term Liability – PFI Scheme
Long Term Liability – Tameside Debt
Long Term Liabilities
19
14
35
14
1.400
0.700
1,594.956
2.102
3.736
1,602.894
1.100
0.700
1,464.352
2.241
4.253
1,472.646
-1,379.534
Net Liability
47.461
-1,426.995
-1,379.534
Usable Reserves
Unusable Reserves
Total Reserves
10
10
10
12
13
63.916
13.190
0.665
0.094
0.379
0.219
78.463
-1,501.966
20
21
51.843
-1,553.809
-1,501.966
I certify that the Balance Sheet and related accounts present a true and fair view of the financial
position of Greater Manchester Fire and Rescue Authority at 31 March 2015.
P McKevitt BA (Hons), ACMA & CGMA
Treasurer to the Authority
24 September 2015
11
CASH FLOW STATEMENT
The Cash Flow Statement shows the changes in cash and cash equivalents of the Authority
during the reporting period. The statement shows how the Authority generates and uses cash and
cash equivalents by classifying cash flows as operating, investing and financing activities. The
amount of net cash flows arising from operating activities is a key indicator of the extent to which
the operations of the Authority are funded by way of taxation and grant income or from the
recipients of services provided by the Authority. Investing activities represent the extent to which
cash outflows have been made for resources which are intended to contribute to the Authority’s
future service delivery. Cash flows arising from financing activities are useful in predicting claims
on future cash flows by providers of capital (ie borrowing) to the Authority.
The Authority has chosen the indirect method in preparing its cash flow statement which provides
a detailed breakdown of the elements of operating, investing and financing activities.
2013/14
Notes
£'m
49.524
-58.595
3.194
2014/15
£'m
Net surplus(-) or deficit on the provision of services
Adjustments to net surplus or deficit on the provision of services for noncash movements
Adjustments for items included in the net surplus or deficit on the provision
of services that are investing and financing activities
22
39.235
-50.107
23
3.148
0.811
0.270
-0.107
Interest Paid
Interest element of finance lease and PFI rental payments
Interest received
0.587
0.257
-0.102
-0.975
Reversal of operating activity items included in the net surplus or deficit on
the provision of service
-0.742
-5.877
Net Cash Flows from Operating Activities
-7.724
8.390
-0.007
-3.187
5.196
Investing Activities
Purchase of Property, Plant and Equipment, Investment Property and
Intangible Assets
Proceeds from the Sale of Property, Plant and Equipment, Investment
Property and Intangible Assets
Capital Grants received
Net Cash Flows from Investing Activities
4.436
-0.026
-3.122
1.288
Financing Activities
0.111
Cash Payments for the Reduction of the Outstanding Liability Relating to
Finance Leases and On-Balance Sheet PFI Contracts
0.124
0.460
0.571
Repayments of Short-Term and Long-Term Borrowing
Net Cash Flows from Financing Activities
4.483
4.607
-0.109
12
Net Decrease/Increase(-) in Cash
-1.829
-18.382
Cash and Cash Equivalents at the beginning of the reporting period
-18.491
-18.491
Cash and Cash Equivalents at the end of the reporting period
-20.321
NOTES TO THE CORE FINANCIAL STATEMENTS
1. Accounting Standards that have been issued but have not yet been adopted
The CIPFA Code of Practice on Local Authority Accounting in the United Kingdom 2014/15 (the
Code) requires an authority to disclose information relating to the impact of an accounting change
that will be required by a new standard that has been issued but not yet adopted.
The following standards have been issued and will be adopted by the Code in 2015/16 and will be
applicable to the Council from 1 April 2015 as follows:
IFRS 13 Fair Value Measurement
This standard provides a consistent definition of fair value and enhanced disclosure requirements.
It is designed to apply to all assets and liabilities which use fair value as a measurement basis.
The adoption of the standard will require surplus assets to be revalued at market value rather than
existing use at present. Therefore other operational Property, Plant and Equipment will be outside
the scope of IFRS13. Overall this standard is not expected to have a material impact on the
Statement of Accounts.
IFRIC 21 Levies
This standard provides guidance on when to recognise a levy imposed by Government. The
IFRIC specifies the obligating event as the activity that triggers the timing of the payment of the
levy. This standard will not have a material impact on the Statement of Accounts.
Annual Improvements to IFRS’s (2011 – 2013 Cycle)
These improvements are minor, principally proving clarification and will not have a material impact
on the Statement of Accounts.
2. Critical judgements in applying Accounting Policies
Government Funding
There is still a high degree of uncertainty about future levels of funding for the Authority and Local
Government as a whole. The Authority has had to consider a range of options on how to continue
to provide its services with a reduced level of funding. As part of these deliberations a possible
reduction in its asset base has been considered. However there is not currently sufficient
indication that the assets of the Authority might be materially impaired.
North West FiReControl Company
The North West FiReControl limited company was created to operate a regional control centre
based in Warrington. The company has four equal partners namely: Greater Manchester,
Cheshire, Cumbria and Lancashire Fire and Rescue Authorities.
The company became operational during 2014/15. It has been determined that it meets with the
definition of a joint operation for Group Accounts purposes. However, on the grounds of
materiality it has been decided that Group Accounts are not required. For the reader’s benefit we
have continued to include details of the relationship with the company and its financial
performance. These details are included in the Related Parties note (note 29).
Private Finance Initiative (PFI)
The Authority is deemed to control the services provided under its PFI arrangement for the
Stretford Fire Station site. This assessment was based on advice received from expert external
advisors. The accounting policy for PFI’s and similar arrangements has been applied to these
13
arrangements and the assets are recognised as Property, Plant and Equipment in the Balance
Sheet.
3.
Assumptions made about the future and other major sources of estimation uncertainty
Pensions
The estimation of the net liability to pay pensions depends on a number of complex judgements
relating to the discount rate used, the rate at which salaries are projected to increase, changes in
retirement ages, mortality rates and expected returns on pension fund assets (LGPS only). A firm
of consulting actuaries is engaged to provide the Authority with expert advice about the
assumptions to be applied to the Local Government Pension Scheme. Advice for the Fire Fighters
pension scheme is provided by the Government Actuary Department.
The effects on the net pensions liability of changes in assumptions can be measured. For
instance, a change in the rate for discounting scheme liabilities of + or – 0.5% would change the
liability by £179.3m A change in excess of earnings of + or – 0.5% would potentially change the
total liability by £26.5m. An increase in excess of pensions of 0.5% would change the liability by
£145.9m and an increase in longevity of 1 year would result in a £40.5m increase in the total
liability. However, the assumptions interact in complex ways and changes to other estimates and
actuarial assumptions may produce a different impact upon the total liability.
Plant, Property and Equipment
The Authority’s portfolio of Land and Buildings is re-valued as part of a 5 year rolling programme.
The value of those assets is based upon calculations and estimation techniques employed by the
Authority’s appointed valuers following the Royal Institute of Chartered Surveyors (RICS)
guidance. Changes in asset values are largely influenced by market forces which can be volatile.
Therefore it is uncertain that the Authority’s assets will not see a significant change in value.
Any revaluation of assets either upward or downward would be reflected in the Authority’s asset
base. It is estimated that a 1% change in asset values would result in a change of £0.640m.
Private Financing Initiative
The PFI arrangement has an implied finance lease within the agreement. The Authority estimates
the implied interest rate within the contract to calculate the interest and principal payments. In
addition, the future RPI increase within the contract has been estimated as remaining constant
throughout the period of the contract.
4.
Material items of income and expense
It is a requirement of the Code of Practice that details of any material items of income and
expenditure that are recorded in the CIES, that would potentially distort any comparison with
previous years are identified. In 2014/15 the following transactions are included in the CIES:IAS19 Employee Benefits
This standard requires the recognition of the cost of pensions to be recorded in the
Comprehensive Income and Expenditure Statement. Due to the volatility and uncertainty of the
estimation process involved in the calculation of these costs there are significant variations each
year. In 2014/15 a credit of £16.4m has been recorded in the Firefighters and Rescue Operations
line (£10.8m in 2013/14).
14
5.
Events after the reporting period
Authorised for Issue Date
The Statement of Accounts was authorised for issue by the Treasurer on 30 June 2015. Events
taking place after this date are not reflected in the financial statements or notes. Where events
taking place before this date provided information about conditions existing at 31 March 2015, the
figures in the financial statements and notes have been adjusted in all material respects to reflect
the impact of this information.
6.
Adjustments between accounting basis and funding basis under regulations
This note details the adjustments that are made to the total comprehensive income and
expenditure recognised by the Authority in the year in accordance with proper accounting practice
to the resources that are specified by statutory provisions as being available to the Authority to
meet future capital and revenue expenditure.
The following sets out a description of the reserves that the adjustments are made against.
General Fund Balance
The General Fund is the statutory fund into which all the receipts of an authority are required to be
paid and out of which all liabilities of the Authority are to be met, except to the extent that statutory
rules might provide otherwise. These rules can also specify the financial year in which liabilities
and payments should impact on the General Fund Balance, which is not necessarily in
accordance with proper accounting practice. The General Fund Balance therefore summarises
the resources that the Authority is statutorily empowered to spend on its services or on capital
investment (or the deficit of resources that the Authority is required to recover) at the end of the
financial year.
Capital Grants Unapplied
The Capital Grants Unapplied Account (Reserve) holds the grants and contributions received
towards capital projects for which the authority has met the conditions that would otherwise
require repayment of the monies but which have yet to be applied to meet expenditure. The
balance is restricted by grant terms as to the capital expenditure against which it can be applied
and/or the financial year in which this can take place.
The table is set out over the page.
15
2014/15
Usable Reserves
General
Fund
Balance
£’m
Adjustments primarily involving the Capital Adjustment Account:
Reversal of items debited or credited to the Comprehensive Income
and Expenditure Statement:
Charges for depreciation and impairment of non-current assets
Revaluation losses on Property Plant and Equipment
Amortisation of Intangible Assets
Capital grants and contributions applied
Revenue Expenditure Funded from Capital under Statute
Amounts of non-current assets written off on disposal to the
Comprehensive Income and Expenditure Statement
Insertion of items not debited or credited to the Comprehensive
Income and Expenditure Statement:
Statutory provision for the financing of capital investment
Capital expenditure charged against the General Fund
Adjustments primarily involving the Capital Grants Unapplied
Account:
Application of grants to capital financing transferred to the Capital
Adjustment Account
Adjustments primarily involving the Pensions Reserve:
Reversal of items relating to retirement benefits debited or credited to the
Comprehensive Income and Expenditure Statement
Employer's pensions contributions and direct payments to pensioners
payable in the year
Adjustments primarily involving the Collection Fund Adjustment
Account:
Amount by which Precept and non-domestic rates income credited to the
Comprehensive Income and Expenditure Statement is different from the
amount calculated for the year in accordance with statutory requirements
Adjustments primarily involving the Accumulated Absences Account:
Amount by which officer remuneration charged to the Comprehensive
Income and Expenditure Statement on an accruals basis is different from
remuneration chargeable in the year in accordance with statutory
requirements
Total Adjustments
16
Capital
Grants
Unapplied
£’m
Movement
in
Unusable
Reserves
£’m
5.572
1.415
0.273
-3.122
-
-5.572
-1.415
-0.273
3.122
1.001
-
-1.001
0.026
-
-0.026
-2.475
-0.798
-
2.475
0.798
-
-0.772
0.772
94.795
-
-94.795
-51.710
-
51.710
-0.473
-
0.473
-0.115
44.389
-0.772
0.115
-43.617
2013/14
Usable Reserves
General
Fund
Balance
£’m
Adjustments primarily involving the Capital Adjustment Account:
Reversal of items debited or credited to the Comprehensive Income
and Expenditure Statement:
Charges for depreciation and impairment of non-current assets
Movements in the market value of Investment Properties
Amortisation of Intangible Assets
Capital grants and contributions applied
Revenue Expenditure Funded from Capital under Statute
Amounts of non-current assets written off on disposal to the
Comprehensive Income and Expenditure Statement
Insertion of items not debited or credited to the Comprehensive
Income and Expenditure Statement:
Statutory provision for the financing of capital investment
Capital expenditure charged against the General Fund
Adjustments primarily involving the Capital Grants Unapplied
Account:
Application of grants to capital financing transferred to the Capital
Adjustment Account
Adjustments primarily involving the Pensions Reserve:
Reversal of items relating to retirement benefits debited or credited to the
Comprehensive Income and Expenditure Statement
Employer's pensions contributions and direct payments to pensioners
payable in the year
Adjustments primarily involving the Collection Fund Adjustment
Account:
Amount by which Precept and non-domestic rates income credited to the
Comprehensive Income and Expenditure Statement is different from the
amount calculated for the year in accordance with statutory requirements
Adjustments primarily involving the Accumulated Absences Account:
Amount by which officer remuneration charged to the Comprehensive
Income and Expenditure Statement on an accruals basis is different from
remuneration chargeable in the year in accordance with statutory
requirements
Total Adjustments
Capital
Grants
Unapplied
£’m
Movement
in
Unusable
Reserves
£’m
4.621
0.070
0.458
-3.187
-
-4.621
-0.070
-0.458
3.187
1.931
-
-1.931
0.007
-
-0.007
-2.653
-3.568
-
2.653
3.568
-
-1.441
1.441
99.597
-
-99.597
-48.533
-
48.533
1.037
-
-1.037
-0.004
49.777
-1.441
0.004
-48.336
17
7.
Other Operating Income and Expenditure
2013/14
£'m
0.007
8.
Expenditure
£'m
Loss on Disposal of Non-Current Assets
-0.035
Operating Rental Income
-0.028
Total
Income
£'m
2014/15
£'m
0.026
-
0.026
-
0.027
-0.027
0.026
0.027
-0.001
Financing and Investment Income and Expenditure
2013/14
£’m
0.701
6.397
66.994
-0.145
-0.054
-3.306
70.587
Interest Payable and similar charges
Surplus(-)/Deficit on trading undertakings not included under Continuing Operations
Net interest on the net defined liability (asset)
Interest receivable and similar income
Investment Property Rental
Expected Return on Pension Assets
Total
2014/15
£’m
0.549
0.401
67.282
-0.133
-0.053
-3.328
64.718
Interest receivable and similar income represents the amount of interest earned on the Authority’s
revenue balances for 2014/15.
9.
Taxation and non specific grant income
2013/14
£’m
-38.863
-26.435
-42.290
-3.187
-1.906
-0.090
-0.283
-113.054
Precept Income
Non Domestic Rates
Revenue Support Grant
Capital Grants and contributions
Council Tax Freeze Grant
Regional Control Centre Grant
Localising Council Tax Support Grant
Section 31 Grants
Total
2014/15
£’m
-39.271
-28.744
-36.209
-3.122
-0.470
-1.261
-0.715
-109.792
The precept received from the ten district authorities of Greater Manchester includes £39.042m for
precepts levied for 2014/15 and adjustments of -£0.148m in respect of previous years. An amount
of £0.377m is adjusted in accordance with statutory requirements in relation to the difference
between the authority’s budgeted and actual share of the surplus/deficit on the Collection Fund.
18
10. Property, Plant and Equipment
Movements on Balances
Movements in 2014/15
Cost or Valuation
At 1 April 2014
Additions
Revaluation increases/decreases(-)
recognised in the Revaluation Reserve
Revaluation increases/decreases(-)
recognised in the Surplus/Deficit on the
Provision of Services
Derecognition - disposals
Assets Reclassified (to)/from Held for Sale
At 31 March 2015
Accumulated Depreciation and
Impairment
At 1 April 2014
Depreciation Charge
Depreciation written out to the
Revaluation Reserve
Depreciation written out to the
Surplus/Deficit(-) on the Provision of
Services
Derecognition - disposals
At 31 March 2015
Land &
Buildings
Vehicles,
Plant,
Furniture &
Equipment
£’m
£’m
Surplus
Assets
£’m
Assets under
Construction
Total
£’m
£’m
PFI Assets
included in
Property,
Plant &
Equipment
£’m
70.048
0.721
30.768
2.470
-
0.169
0.495
100.986
3.685
3.084
-
4.141
-
-
-
4.141
-
-1.872
-
0.073
-
-1.799
-
73.038
-1.608
31.630
-
0.664
-1.608
0.203
105.608
-0.027
0.203
0.276
-6.496
-3.349
-17.830
-2.201
0.000
-0.023
0.000
-
-24.327
-5.572
-0.323
-0.157
0.206
-
-
0.206
-
0.516
-
-0.158
-
0.358
-
-9.123
1.593
-18.438
-0.181
0.000
1.593
-27.742
0.027
-0.453
63.916
63.553
13.192
12.938
0.095
0.000
0.664
0.169
77.866
76.660
2.604
2.762
3.057
Net Book Value
At 31 March 2015
At 1 April 2014
19
Movements in 2013/14
Cost or Valuation
At 1 April 2013
Additions
Revaluation increases/decreases(-)
recognised in the Revaluation Reserve
Revaluation increases/decreases(-)
recognised in the Surplus/Deficit on the
Provision of Services
Derecognition - disposals
Assets Reclassified (to)/from Held for Sale
Other movements in cost or valuation
At 31 March 2014
Accumulated Depreciation and
Impairment
At 1 April 2013
Depreciation Charge
Depreciation written out to the
Revaluation Reserve
Depreciation written out to the
Surplus/Deficit(-) on the Provision of
Services
Derecognition - disposals
At 31 March 2014
Land &
Buildings
Vehicles,
Plant,
Furniture &
Equipment
£’m
£’m
Assets
under
Construction
Total
£’m
£’m
PFI Assets
included in
Property,
Plant &
Equipment
£’m
60.678
2.042
28.991
1.854
0.670
2.275
90.339
6.171
2.363
-
5.072
-
-
5.072
0.265
0.085
-
-
0.085
0.456
-0.203
2.374
70.048
-0.479
-
-
0.402
30.768
-2.776
0.169
-0.479
-0.203
0.000
100.986
3.084
-4.376
-2.857
-16.106
-2.196
0.000
-20.482
-5.053
-0.237
-0.188
0.425
-
-
0.425
0.035
0.312
-
-
0.312
0.068
-6.496
0.471
-17.830
0.000
0.471
-24.327
-0.322
63.553
56.302
12.938
12.884
0.169
0.671
76.660
69.857
2.762
2.126
Net Book Value
At 31 March 2014
At 1 April 2013
Capital Commitments
At 31 March 2015, the Authority had entered into a number of contracts for the construction or
enhancement of Property, Plant and Equipment in 2015/16 and future years budgeted to cost
£0.832m.
In addition, c. £11.1m has been committed after the 31st March 2015, in respect of the Bury
Training and Community site scheme. A contract to design and build the new site was signed by
GMFRS in April 2015 with works commencing during May.
Effects of changes in estimates
As required by IFRS, valuations carried out in 2014/15 took into account componentisation of
Assets. The properties valued by the Valuer in 2014/15 were split into components of Frame,
Services and Yards which have different remaining lives. This componentisation increased the
depreciation charge in 2014/15 on the ten sites valued from £0.279m (as per the previous
valuation) to £0.743m (based on the new valuation). The impact of this change will carry forward
into 2015/16 and future years. All properties have been valued based on this componentisation
split over the past five years.
20
Revaluations
A rolling programme of revaluation of land and buildings is contained within the Authority's Asset
Management Plan. This rolling programme caters for the re-valuation of all fixed assets and is
carried out over 5 years. The valuation of ten properties for financial year 2014/15 (as at 1 April
2014) was carried out by GVA Grimley, Norfolk House, 7 Norfolk Street, Manchester, M2 1DW.
Land and properties are valued at open market value for existing use, or where no market exists,
at depreciated replacement cost. Land and properties valued at open market value have not been
depreciated but other properties are shown net of depreciation.
Vehicles, plant, furniture and equipment are valued at historic cost less depreciation.
The following statement shows the progress of the rolling programme for the valuation of fixed
assets. The valuations for 2014/15 were carried out by Michael A. Kings FRICS and Chris Morton
BA(Hons) of GVA Grimley.
Carried at historic cost
Valued at fair value as at:
PFI Stretford (1999 and 2004)
2007/08
2008/09 (includes impairment review)
2009/10
2010/11
2011/12
2012/13
2013/14
2014/15
Total Cost or Valuation
Land and
Buildings
£’m
74.598
-0.972
0.186
-10.328
0.194
-0.304
2.712
-0.271
5.157
2.269
73.241
21
11. Assets held for sale
For assets to be included under this category they must meet with the following criteria:

The asset (or disposal group) must be available for immediate sale in its present condition
subject to terms that are usual and customary for sales of such assets (or disposal
groups).

The sale must be highly probable; the appropriate level of management must be
committed to a plan to sell the asset (or disposal group) and an active programme to
locate a buyer and complete the plan must have been initiated.

The asset (or disposal group) must be actively marketed for a sale at a price that is
reasonable in relation to its current fair value.

The sale should be expected to qualify for recognition as a completed sale within one
year of the date of classification and action required to complete the plan should
indicate that it is unlikely that significant changes to the plan will be made or that the
plan will be withdrawn.
2013/14
2014/15
£’m
£’m
Balance outstanding at start of year
0.000
0.203
Assets newly classified as held for sale:
Property, Plant & Equipment
0.203
-
-
-0.203
0.203
0.000
Assets declassified as held for sale:
Property, Plant & Equipment
Balance outstanding at end of year
12. Investment properties
The following table summarises the movement in the fair value of investment properties over the
year:
Balance at start of the year
Additions: Purchases
Net gains/losses(-) from fair value adjustments
Balance at end of the year
2013/14
£’m
0.449
-0.070
0.379
2014/15
£’m
0.379
0.379
13. Intangible assets
The Authority accounts for its software as intangible assets, to the extent that the software is not
an integral part of a particular IT system and accounted for as part of the hardware item of
Property, Plant and Equipment. The intangible assets include purchased licences. There are
currently no internally generated items of software treated as intangible assets.
All software is given a finite useful life, based on assessments of the period that the software is
expected to be of use to the Authority. The useful lives assigned to the major software suites
used by the Authority are between 3 and 15 years.
22
The carrying amount of intangible assets is amortised on a straight-line basis. The amortisation of
£0.273m charged to revenue in 2014/15 was charged to the appropriate service heading.
The movement on Intangible Asset balances during the year is as follows:
2013/14
Other Assets
£’m
2014/15
Other Assets
£’m
8.308
-7.448
0.860
8.402
-7.906
0.496
0.094
-0.458
0.006
-0.273
0.496
-6.687
6.677
0.219
8.402
-7.906
0.496
1.721
-1.502
0.219
Balance at start of year:
Gross carrying amounts
Accumulated amortisation
Net carrying amount at start of year
Additions:
Purchases
Amortisation for the period
Disposals:
Disposals: cost
Disposals: amortisation
Net carrying amount at end of year
Comprising:
Gross carrying amounts
Accumulated amortisation
During 2014/15, the Command and Control system was disposed of following the commencement
of the North West Fire Control facility. The disposal value of the system was £6.469m.
14. Financial Instruments
The following categories of financial instrument are carried in the Balance Sheet:
Long-term
31 March
31 March
2014
2015
£’m
£’m
Current
31 March
31 March
2014
2015
£’m
£’m
Investments
Loans and receivables:
Short Term Investments
Cash at Bank in hand / overdrawn (-)
Total Investments
0.000
0.000
18.845
-0.354
18.491
19.950
0.370
20.320
Debtors
Financial assets carried at contract amounts
Less items not classed as Financial Instruments*
Total Debtors
0.000
0.000
5.724
-4.787
0.937
9.230
-7.191
2.039
Borrowings
Financial liabilities at amortised cost
Total Borrowings
0.700
0.700
0.700
0.700
4.000
4.000
0.000
Other Long Term Liabilities
PFI and finance lease liabilities
Total other long term liabilities
2.241
2.241
2.102
2.102
0.000
0.000
Creditors**
Financial liabilities carried at contract amount
Less items not classed as Financial Instruments
Total Creditors
0.000
0.000
12.872
-6.540
6.332
12.203
-6.440
5.763
23
* This figure includes a debtor relating to the cycle to work scheme which is classified as an
employee benefit scheme and therefore not subject to the financial instruments accounting
requirements.
** For completeness the creditors figure includes the current liability for the PFI Finance lease
together with a figure for accrued interest.
Income, Expense, Gains and Losses
2013/14
Financial
Financial
Liabilities
Assets: Loans
measured at
and
Amortised
Receivables
Cost
£’m
£’m
Interest expense
Total expense in Surplus or Deficit
on the Provision of Services
Interest Income
Total Income in Surplus or Deficit on
the Provision of Services
Net gain/loss for the year
2014/15
Financial
Financial
Liabilities
Assets: Loans
measured at
and
Amortised
Receivables
Cost
£’m
£’m
0.701
-
0.550
-
0.701
0.000
0.550
0.000
-
-0.145
-
-0.133
0.000
-0.145
0.000
-0.133
0.701
-0.145
0.550
-0.133
Fair Value of Assets and Liabilities
Financial liabilities, financial assets represented by loans and receivables and long-term debtors
and creditors are disclosed in the balance sheet at amortised cost. Their fair value can be
assessed by calculating the present value of the cash flows that will take place over the remaining
life of the instruments, using the following assumptions:




Estimated ranges of interest rates at 31 March 2015 for loans from the PWLB and for short
term investments based on new lending rates for equivalent loans at that date
no early repayment or impairment is recognised
where an instrument will mature in the next 12 months, the carrying amount is assumed to
approximate to fair value
the fair value of trade and other receivables is taken to be the invoiced or billed amount.
The fair values calculated by Capita Asset Services, the Authority’s Treasury Management
Advisor are as follows:
Financial Liabilities
PWLB Borrowing
31 March 2014
Carrying Amount
Fair Value
£’m
£’m
4.700
4.931
31 March 2015
Carrying Amount
Fair Value
£’m
£’m
0.700
0.791
The IFRS Code also allows for an alternative method of calculation to the above based on the
premature repayment set of rates. PWLB has calculated the value of the loans under this method
for 2014/15 as £0.890m (£5.041m in 2013/14).
The fair value of the liabilities is greater than the carrying amount because the Authority’s portfolio
of loans include a number of fixed rate loans where the interest rate payable is higher than the
rates available for similar loans at the balance sheet date. This commitment to pay interest at
above current market rates increases the amount that the Authority would have to pay if the lender
agreed to the early repayment of the loans.
24
31 March 2014
Carrying Amount
Fair Value
£’m
£’m
18.845
18.878
Financial Assets
Loans and Receivables
31 March 2015
Carrying Amount
Fair Value
£’m
£’m
19.950
20.000
Short Term Borrowing
As at 31 March 2015 no short term PWLB loans were outstanding (£4.000m in 2013/14).
Long-Term Borrowing
External long-term borrowing is analysed by maturity date below:
Maturity in Years
Source
1 to 2
2 to 5
5 to 10
Over 10
£'m
£'m
£'m
£'m
£'m
Public Works Loan Board (PWLB)
Total
31 March 2014
£’m
2.241
4.253
6.494
Total
-
-
-
0.700
0.700
0.000
0.000
0.000
0.700
0.700
Long Term Liability
PFI
Debt transferred from former GMC
31 March 2015
£’m
2.102
3.736
5.838
The debt outstanding on the assets transferred from the Greater Manchester Council (GMC)
following the 1986 reorganisation is administered by Tameside Metropolitan Borough Council on
behalf of all successor Authorities. There is £0.517m debt repayable with 12 months. This is
classified as a short term creditor on the Balance Sheet.
Nature and extent of risks arising from financial instruments
The Authority’s activities expose it to a variety of financial risks:

Credit Risk – the possibility that other parties might fail to pay amounts due to the Authority

Liquidity Risk – the possibility that the Authority might not have funds available to meet its
commitments to make payments

Market Risk – the possibility that financial loss might arise for the Authority as a result of
changes in such measures as interest rates and stock market movements.
The Authority’s overall risk management programme focuses on the unpredictability of financial
markets and seeks to minimise potential adverse effects on the resources available to fund
services. Risk Management is carried out, under policies approved in the Annual Treasury
Management Policy.
The Authority has adopted CIPFA’s Treasury Management in the Public Services ‘Code of
Practice’. In accordance with the code, the Authority sets an annual Treasury Management Policy
containing a number of measures to control financial instrument risks including;



Approved Methods of Raising Capital Finance
Limits on External Borrowing
Policy Sources and Types of Borrowing Instruments
25
Credit Risk
Credit risk arises from deposits with banks and financial institutions, as well as credit exposures to
the Authority’s customers. The risk is minimised through the Treasury Policy Statement, which
requires that deposits are not made with financial institutions unless they meet identified minimum
credit criteria. The Authority applies the creditworthiness service provided by Capita Asset
Services. This service employs a sophisticated approach incorporating:


Credit ratings, credit watches and credit outlooks from all three credit rating agencies
Credit Default Swap (CDS) spreads to give an early warning of likely changes in credit
ratings.
This modelling combines credit ratings, credit watches and credit outlooks in a weighted scoring
system which is then combined with an overlay of CDS spreads to create colour coded bands.
These colour codes are used to indicate relative creditworthiness of counterparties and the
suggested maximum investment period.
The annual Treasury management Policy also imposes a maximum sum or percentage to be
invested with financial institutions. Due to the current shortage of high quality counterparties, a
percentage limit was introduced to be utilised in periods of high investment balances.
The credit criteria in respect of financial assets held by the Authority are detailed below;
Financial Asset
Deposits with part nationalised Banks
Deposits with Banks
Deposits with Building Societies
Deposits with Money Market Funds
Deposits with Local Authorities
Maximum Investment
£’m
10.000
10.000
2.000
2.000
5.000
% Limit
45%
35%
-
The Authority does not generally allow credit for customers but some of the current balance is past
its due date for payment. The past due date amount can be analysed by age as follows:
Less than three months
Three to six months
Six months to one year
More than one year
2014/15
£’m
0.438
0.005
0.006
0.049
Liquidity Risk
The Authority has a comprehensive cash flow management system that seeks to ensure that cash
is available as needed. If unexpected movements happen, the Authority has ready access to
borrowings from the money markets and the Public Works Loans Board. There is no significant
risk that it will be unable to raise finance to meet its commitments under financial instruments.
Instead, the risk is that the Authority will be bound to replenish a significant proportion of its
borrowings at a time of unfavourable interest rates. The maturity risk of financial liabilities is
shown below:
Less than 1 year
1 – 2 years
2 – 5 years
More than 5 years
All trade and other payables are due to be paid in less than one year.
26
2014/15
£’m
0.700
Market Risk
Interest Rate Risk
The Authority is exposed to risk in terms of its exposure to interest rate movements on its
borrowings and investments. Movements in interest rates have a complex impact on the
Authority. For instance, a rise in interest rates would have the following effects:

Borrowings at fixed rates – the fair value of the liabilities borrowings will fall

Investments at variable rates – the interest income credited to the Surplus or Deficit on the
Provision of Services will rise

Investment at fixed rates – the fair value of the assets will fall.
If all interest rates had been 1% higher (with all other variables held constant) the financial effect
would have been:
Daily average investment balance (average rate of interest 0.56%)
Additional Interest assuming interest rates 1% higher
Decrease in fair value of fixed rate borrowing liabilities (no impact on Comprehensive
Income & Expenditure Statement)
2014/15
£’m
28.151
0.282
-0.090
Foreign Exchange Risk
The Authority has no financial assets or liabilities denominated in foreign currencies and thus has
no exposure to loss arising from movements in exchange rates.
15. Inventories
Inventories (stock) are materials or supplies that will be used in producing goods or providing
services or distributed as part of the Authority’s ordinary business.
Balances are carried as specified in the IFRS code.
Consumable Stores
Balance outstanding at start of year
Purchases
Recognised as an expense in the year
Written off balances
Balance outstanding at year-end
2013/14
£’m
0.992
1.641
-1.624
0.030
1.039
2014/15
£’m
1.039
1.398
-1.565
-0.021
0.851
16. Debtors
31 March 2014
31 March 2015
£'m
£'m
0.311
4.240
1.173
Central Government Bodies
Other Local Authorities
NHS Bodies
Public Corporations
Other entities and individuals
0.308
6.064
2.859
5.724
Total Debtors
9.230
27
17. Cash and Cash Equivalents
The balance of Cash and Cash Equivalents is made up of the following elements:
31 March 2014
£’m
0.083
-0.437
18.845
18.491
31 March 2015
£’m
-0.204
0.575
19.950
20.321
Cash held by the Authority
Bank current accounts in hand / overdrawn (-)
Short-term deposits with building societies
Total Cash and Cash Equivalents
18. Creditors
31 March 2014
31 March 2015
£'m
1.738
6.196
4.938
12.872
£'m
Central Government Bodies
Other local authorities
NHS Bodies
Public Corporations
Other entities and individuals
Total Creditors
1.554
4.996
5.653
12.203
19. Provisions
Balance at 1 April 2014
Additional provisions made in 2014/15
Provision utilised in year
Transfers in year
Balance at 31 March 2015
Insurance
Provision
£’m
NDR Appeals
Provision
£’m
Total
Provisions
£’m
1.600
0.762
-0.570
-0.192
1.600
0.548
2.069
-0.548
2.069
2.148
2.831
-1.118
-0.192
3.669
Insurance
Provision
£’m
NDR Appeals
Provision
£’m
Total
Provisions
£’m
0.200
1.400
1.600
2.069
2.069
2.269
1.400
3.669
Split between short and long term
Short term component of provisions balance
Long term component of provisions balance
Total
The purpose and operation of the provisions are discussed in the following notes.
a) Insurance
At 31 March 2015 the Authority held an Insurance provision of £1.600m. The purpose of setting
aside this fund is for future payments of claims made or yet to be made for incidents which
occurred before 31 March 2015. These include incidents where a legal liability arises and
incidents of damage to Fire Authority property. Increases to the provision in 2014/15 reflect
contributions from services. The costs of premium payments, settlement of claims and risk
management are shown as decreases to the provision in 2014/15.
28
b) NDR Appeals Provision
This provision represents the authority’s share of the 10 Manchester Councils NDR appeals
provision. This is equivalent to 1% of the overall total.
20. Usable Reserves
2013/14
2014/15
£’m
£’m
27.511
19.158
0.792
47.461
Earmarked Reserves
36.208
15.615
0.020
General Fund Balances
Capital Grants Unapplied Reserve
Total Usable Reserves
51.843
Transfers to/from Earmarked Reserves
This note shows the movements on earmarked reserves. These funds are available for the
financing of current and future expenditure plans.
Capital Reserve
Balance at Transfers Transfers Balance at Transfers
31 March
Out
in
31 March
Out
2013
2013/14
2013/14
2014
2014/15
£’m
£’m
£’m
£’m
£’m
13.220
14.178
0.958
-
Transfers
in
2014/15
£’m
5.953
Balance at
31 March
2015
£’m
20.131
Insurance Reserve
4.785
0.190
0.101
4.696
0.025
0.193
4.864
Unspent Grant Reserve
5.546
3.951
0.840
2.435
0.852
1.961
3.544
Earmarked Budgets Reserve
2.030
0.896
1.856
2.990
1.190
1.714
3.514
Business Rates Reserve
0.000
-
-
0.000
-
1.500
1.500
Restructuring Reserve
1.240
-
-
1.240
0.031
-
1.209
Innovation & Partnership/CYP
Reserve
1.427
0.127
0.316
1.616
0.768
0.318
1.166
0.530
28.778
0.300
5.464
0.126
4.197
0.356
27.511
0.208
3.074
0.132
11.771
0.280
36.208
Projects Reserve
Total
The purpose and operation of the reserves are discussed in the following notes.
a) Capital Reserve
The Capital Reserve is built up from revenue contributions for the purpose of funding deficiencies
in the resources available to finance the Authority’s capital programme. No contributions were
required in 2014/15 from the reserve. A number of transfers of underspends in line with the
approved budget strategy were made during the year to support the costs of future schemes.
b) Insurance Reserve
This reserve has been established as a result of reducing the insurance provision in compliance
with IAS37. The reserve provides a prudent contingency against unforeseen future claims,
including the MMI Scheme of Arrangement, details of which are provided below. The reserve also
provides a prudent hedge against changes in the insurance market which may require premium
increases. A contribution towards risk management schemes was made in the year.
In January 1994, the Authority’s then insurer, Municipal Mutual Insurance (MMI), made a Scheme of
Arrangement with its creditors. Under this scheme, claims are initially paid out in full, but if the
eventual winding up of the company results in insufficient assets to meet all liabilities, a claw back
clause will be triggered, which could affect claims already paid.
29
On 13 November 2012, the directors of MMI ‘triggered’ MMI’s Scheme of Arrangement (‘the
Scheme’) under section 425 of the Companies Act 1985 (now section 899 of the Companies Act
2006). This was because solvent run off could not be foreseen and there was no alternative to
insolvent liquidation.
A Levy Notice was issued on 01 January 2014 by the Scheme Administrator at a rate of 15% on
Established Scheme Liabilities which exceeded £50,000 in aggregate. Payments made on or after
the Levy Notice Date in respect of Established Scheme Liabilities, to the extent that such
payments, when aggregated with other such payments exceed £50,000, have been made subject
to the application of the Payment Percentage (85%).
The rate of Levy may be adjusted by the Scheme Administrator if, following a review of the
financial position of MMI, he determines that the rate requires to be increased or decreased. Any
such adjustment would be applied to the carried forward Gross Payments at that time, based upon
the amounts.
A claw back clause has now been invoked and payment at a 15% levy based on claims at 31
December 2013 has been made in 2013/14. This equates to £0.206m. As at 31 March 2014 the
Authority holds a further £0.250m in respect of the potential contributions to future claim
settlements and a future levy.
c) Restructuring Reserve
This reserve was created to provide funds towards the costs of transition as the levels of funding
provided by the Government as announced in the spending review, continues to fall over the next
few years.
d) Innovation & Partnership /CYP Reserve
This reserve was created to provide the necessary funding for future partnership and innovation
schemes and to support Children’s and Young People’s initiatives.
e) Unspent Grant Reserve
The reserve represents grant funding unspent during the year which is required to meet costs in
future years.
f) Earmarked Budgets Reserve
The earmarked budget reserve will be utilised to meet the costs of future projects as part of the
budget strategy.
g) Projects Reserve
This reserve was created specifically to support project work within the Authority.
h) General Fund Balances
Available balances at 31 March 2015 were £15.615m (£19.158m at 31 March 2014).
i) Capital Grants Unapplied Reserve
This reserve represents the amount of unused capital grant as at 31 March 2015. In line with
accounting practice it has been recognised in the Comprehensive Income and Expenditure
Statement (CIES) but the expenditure to be financed from the grants has not been incurred at the
balance sheet date therefore, it is removed from the CIES and placed in the Capital Grants
Unapplied Reserve.
j) Business Rates Reserve
This reserve has been created to mitigate the impact of potential significant deficits on the 10
Manchester Council respective Collection Funds, of which the Authority is liable for 1%.
30
21. Unusable Reserves
2013/14
2014/15
£’m
£’m
14.610
23.840
-1,464.352
-0.894
-0.199
-1,426.995
18.535
23.117
Revaluation Reserve
Capital Adjustment Account
Pensions Reserve
-1,594.956
-0.421
Collection Fund Adjustment Account
Accumulated Absences Account
Total Unusable Reserves
-0.085
-1,553.810
Revaluation Reserve
The Revaluation Reserve contains the gains made to the Authority arising from increases in the
value of Property, Plant & Equipment and Intangible Assets. The balance is reduced when assets
with accumulated gains are:



revalued downwards or impaired and the gains are lost
used in the provision of services and the gains are consumed through depreciation, or
disposed of and the gains are realised.
The reserve contains only revaluation gains accumulated since 1 April 2007, the date that the
reserve was created. Accumulated gains arising before that date are consolidated into the
balance on the Capital Adjustment Account.
2013/14
2014/15
£’m
£’m
9.497
Balance at 1 April
6.901
Upward revaluation of assets
Downward revaluation of assets and impairment losses not charged to the
Surplus/Deficit on the Provision of Services
-1.439
5.462
-0.349
-0.349
14.610
14.610
4.644
-0.324
Surplus or deficit on revaluation of non-current assets not posted to the
Surplus/Deficit on the Provision of Services
Difference between fair value depreciation and historical cost depreciation
Amount written off to the Capital Adjustment Account
Balance at 31 March
£’m
4.320
-0.396
-0.396
18.535
31
Capital Adjustment Account
The Capital Adjustment Account absorbs the timing differences arising from the different
arrangements for accounting for the consumption of non-current assets and for financing the
acquisition, construction or enhancement of those assets under statutory provisions. The account
is debited with the cost of acquisition, construction or enhancement as depreciation, impairment
losses and amortisations are charged to the Comprehensive Income and Expenditure Statement
(with reconciling postings from the Revaluation Reserve to convert fair value figures to a historical
cost basis). The account is credited with the amounts set aside by the Authority as finance for the
costs of acquisition, construction and enhancement.
The account contains accumulated gains and losses on Investment Properties and gains
recognised on donated assets that have yet to be consumed by the Authority.
The account also contains revaluation gains accumulated on Property, Plant & Equipment before
1 April 2007, the date that the Revaluation Reserve was created to hold such gains.
2013/14
£’m
19.730
-5.053
0.432
-0.458
-1.931
-0.007
-7.017
0.349
-6.668
3.187
1.441
2.652
3.568
10.848
-0.070
-0.070
23.840
32
2014/15
£’m
Balance at 1 April
Reversal of items relating to capital expenditure debited or credited to
the CI&E:
Charges for depreciation and impairment of non-current assets
Revaluation losses(-)/gains on Property, Plant & Equipment
Amortisation of intangible assets
Revenue Expenditure Funded from Capital Under Statute
Amounts of non-current assets written off on disposal or sale as part of the
gain/loss on disposal to the CI&E
£’m
23.840
-5.572
-1.415
-0.273
-1.000
-0.026
-8.286
0.396
-7.890
Adjusting amounts written out of the Revaluation Reserve
Net written out amount of the cost of non-current assets consumed in
the year
Capital financing applied in the year:
Capital grants and contributions credited to the CI&E that have been
applied to capital financing
Application of grants to capital financing from the Capital Grants Unapplied
Account
Statutory provision for the financing of capital investment charged against
the General Fund
Capital expenditure charged against the General Fund
3.122
0.772
2.475
0.798
7.167
Movements in the market value of Investment Properties debited or credited
to the Comprehensive Income and Expenditure Statement
0.000
Balance at 31 March
23.117
Pensions Reserve
The Pension Reserve absorbs the timing differences arising from the different arrangements for
accounting for post employment benefits and for funding benefits in accordance with statutory
provisions. The Authority accounts for post employment benefits in the Comprehensive Income
and Expenditure Statement as the benefits are earned by employees accruing years of service,
updating the liabilities recognised to reflect inflation, changing assumptions and investment returns
on any resources set aside to meet the costs. However, statutory arrangements require benefits
earned to be financed as the Authority makes employer’s contributions to pension funds or
eventually pays any pensions for which it is directly responsible. The debit balance on the
Pensions Reserve therefore shows a substantial shortfall in the benefits earned by past and
current employees and the resources the Authority has set aside to meet them. The statutory
arrangements will ensure that funding will have been set aside by the time the benefits come to be
paid.
2013/14
2014/15
£’m
£’m
-1,485.812
72.524
-99.597
48.533
-1,464.352
Balance at 1 April
Actuarial gains or losses on pensions assets and liabilities
Reversal of items relating to retirement benefits debited or credited to the
Surplus or Deficit on the Provision of Services in the Comprehensive
Income and Expenditure Statement
Employer’s pensions contributions and direct payments to pensioners
payable in the year
Balance at 31 March
-1,464.352
-87.518
-94.796
51.710
-1,594.956
Collection Fund Adjustment Account
The Collection Fund Adjustment Account manages the differences arising from the recognition of
precept income and non-domestic rates income in the Comprehensive Income and Expenditure
Statement as it falls due from council tax payers and business rate payers compared with the
statutory arrangements for paying across amounts to the General Fund from the Collection Fund.
2013/14
2014/15
£’m
£’m
0.143
Balance at 1 April
-1.037
Amount by which precept income and non-domestic rates income credited
to the Comprehensive Income and Expenditure Statement is different from
council tax income and non-domestic rates income calculated for the year
in accordance with statutory requirements
-0.894
Balance at 31 March
-0.894
0.473
-0.421
The above deficit does not impact upon the bottom line and therefore does not affect balances in
2014/15. However this sum will need to be deducted from the budgeted precept income in
2016/17. Monies have been earmarked within reserves to meet this potential cost. This
significant deficit is due to Councils being required to account for back dated appeals on business
rates, which has resulted in large collection fund deficits being reported across most of the Greater
Manchester Councils.
33
Accumulated Absences Account
The Accumulated Absences Account absorbs the differences that would otherwise arise on the
General Fund Balance from accruing for compensated absences earned but not taken in the year
e.g. annual leave entitlement carried forward at 31 March. Statutory arrangements require that
the impact on the General Fund Balance is neutralised by transfers to or from the account.
2013/14
2014/15
£’m
-0.203
0.203
-0.199
0.004
-0.199
£’m
Balance at 1 April
Settlement or cancellation of accrual made at the end of the preceding
year
Amounts accrued at the end of the current year
£’m
-0.199
0.199
-0.085
Amount by which officer remuneration charged to the
Comprehensive Income and Expenditure Statement on an accruals
basis is different from remuneration chargeable in the year in
accordance with statutory requirements
Balance at 31 March
0.115
-0.085
22. Cashflow – Adjustments to net surplus or deficit on the provision of service for non-
cash movements
2013/14
£’m
-5.053
0.362
-1.931
-0.458
-51.064
-0.628
-0.007
0.047
4.421
-4.284
-58.595
2014/15
£’m
Depreciation of non-current assets
Revaluation gain(-)/loss of non-current assets
De-minimus
Amortisation of intangible fixed assets
Pension Fund adjustments
Contributions to provisions
Carrying amount of PPE, investment property and intangible assets sold
Increase(-)/decrease in inventories
Increase(-)/decrease in debtors
Increase/decrease(-) in creditors
-5.572
-1.415
-1.001
-0.273
-43.086
-1.521
-0.026
-0.188
2.000
0.974
-50.108
23. Cashflow – Adjustments for items included in the net surplus or deficit on the
provision of services that are investing or financing activities
2013/14
£’m
0.007
3.187
3.194
34
2014/15
£’m
Proceeds from the disposal of PPE, investment property and intangible assets
Capital grants credited to surplus or deficit on the provision of services
0.026
3.122
3.148
24. Amounts reported for resource allocation decisions
The analysis of income and expenditure by service on the face of the Comprehensive Income and
Expenditure Statement is that specified by the Service Reporting Code of Practice. However,
decisions about resource allocation are taken by the Authority’s Policy, Resources and
Performance Committee on the basis of budget reports analysed across services. These reports
are prepared on a different basis from the accounting policies used in the financial statements. In
particular:



no charges are made in relation to capital expenditure (whereas depreciation, revaluation and
impairment losses in excess of the balance on the Revaluation Reserve and amortisations are
charged to services in the Comprehensive Income and Expenditure Statement)
the cost of retirement benefits is based on cash flows (payment of employer’s pensions
contributions) rather than current service cost of benefits accrued in the year
expenditure on some support services is budgeted for centrally and not charged to services.
The income and expenditure of the Authority’s principal services recorded in the budget reports for
the year is as follows:
Service Income and Expenditure 2014/15
Government Grants
Other Grants, Reimbursements & Contributions
Customer & Client Receipts
Recharges to Other Revenue A/C Heads
Total Income
Community
Safety
£’m
-0.774
-0.926
-1.700
Firefighting and
Rescue Operations
£’m
-0.549
-1.094
-0.114
-9.545
-11.302
Total
£’m
-0.549
-1.868
-1.040
-9.545
-13.002
Employees Pay
Pensions
Indirect Employee Allowances
Premises Related Expenditure
Transport Related Expenditure
Supplies, Services & Other Expenses
Support Services
Capital Charges
Capital Financing Costs
Total Expenditure
6.740
0.562
0.150
0.006
0.278
1.315
12.826
0.073
0.130
22.081
48.674
7.946
0.299
3.014
0.973
5.255
23.902
5.240
0.411
95.714
55.414
8.508
0.449
3.020
1.251
6.570
36.728
5.314
0.541
117.795
Net Expenditure
20.381
84.411
104.793
Service Income and Expenditure 2013/14
Government Grants
Other Grants, Reimbursements & Contributions
Customer & Client Receipts
Recharges to Other Revenue A/C Heads
Total Income
Community
Safety
£’m
-0.184
-0.697
-0.242
-1.123
Firefighting and
Rescue Operations
£’m
-0.547
-1.742
-0.281
-12.214
-14.784
Total
£’m
-0.547
-1.926
-0.978
-12.456
-15.907
Employees Pay
Pensions
Indirect Employee Allowances
Premises Related Expenditure
Transport Related Expenditure
Supplies, Services & Other Expenses
Support Services
Capital Charges
Capital Financing Costs
Total Expenditure
6.271
0.563
0.141
0.003
0.270
2.125
14.301
0.064
23.738
53.005
7.941
0.581
2.837
1.148
3.912
24.140
4.061
0.232
97.857
59.277
8.504
0.722
2.840
1.417
6.037
38.441
4.125
0.232
121.595
Net Expenditure
22.615
83.073
105.688
35
Reconciliation to Net Cost of Services in Comprehensive Income and Expenditure
Statement
Cost of Services in Service Analysis
Additional Segments not included in analysis
Amounts not included in the analysis but included in the CI&E Statement
Amounts included in the analysis but not included in the CI&E Statement
Net Cost of Services in Comprehensive Income and Expenditure Statement
Reconciliation to
Subjective
Analysis
Operating Lease
Income
Investment
Property Lease
Income
Expected Returns
on Pensions Assets
Interest &
investment income
Total income
Employees Pay
Pensions
Indirect employee
expenses
Premises related
expenditure
Transport related
expenditure
Supplies, services
& other expenses
Support services
Capital charges
Capital financing
costs
Pension interest
cost
Deficit on trading
undertakings
Interest payable
Loss on disposal of
non-current assets
Total Operating
Expenses
Surplus(-)/Deficit
on the provision
of services
36
2014/15
£’m
104.793
1.011
-20.868
-0.627
84.309
Service
Analysis
Services
not in
analysis
Amounts
not
included in
analysis but
included in
CI&E
Amounts
included
in analysis
but not
included
in CI&E
Net Cost of
Services
Corporate
Amounts
Total
£’m
£’m
£’m
£’m
£’m
£’m
£’m
2014/15
Government Grants
& Contributions
Other Grants,
Reimbursements &
Contributions
Customer & Client
Receipts
Recharges
2013/14
£’m
105.688
1.121
-12.624
-2.168
92.017
-0.549
-
-
-
-0.549
-70.520
-71.069
-1.868
-0.150
-
1.987
-0.031
-39.271
-39.302
-1.040
-0.058
-
-
-1.098
-
-1.098
-9.545
-
-
-
-9.545
-
-9.545
-
-
-
-
0.000
-0.027
-0.027
-
-
-
-
0.000
-0.053
-0.053
-
-
-
-
0.000
-3.328
-3.328
-
-
-
-
0.000
-0.133
-0.133
-13.002
55.414
8.508
-0.208
0.411
0.122
0.000
-20.868
1.987
-
-11.223
55.824
-12.238
-113.333
-
-124.556
55.824
-12.238
0.449
0.002
-
-
0.451
-
0.451
3.020
-
-
-
3.020
-
3.020
1.251
0.026
-
-
1.277
-
1.277
6.570
0.469
-
-2.074
4.966
36.728
5.314
0.181
0.007
-
-
36.909
5.321
0.541
0.002
-
-0.541
0.002
-
-
-
-
0.000
67.282
67.282
-
-
-
-
0.000
0.401
0.401
-
-
-
-
0.000
0.550
0.550
-
-
-
-
0.000
0.026
0.026
117.795
1.219
-20.868
-2.614
95.531
68.259
163.790
104.793
1.011
-20.868
-0.627
84.309
-45.074
39.235
4.966
-
36.909
5.321
0.002
Reconciliation to
Subjective
Analysis
Service
Analysis
Services
not in
analysis
Amounts
not
included in
analysis but
included in
CI&E
Amounts
included
in analysis
but not
included
in CI&E
Net Cost of
Services
Corporate
Amounts
Total
£’m
£’m
£’m
£’m
£’m
£’m
£’m
2013/14
Government Grants
& Contributions
Other Grants,
Reimbursements &
Contributions
Customer & Client
Receipts
Recharges
Operating Lease
Income
Investment
Property Lease
Income
Expected Returns
on Pensions Assets
BCCI Income
Interest &
investment income
Total income
Employees Pay
Pensions
Indirect employee
expenses
Premises related
expenditure
Transport related
expenditure
Supplies, services
& other expenses
Support services
Capital charges
Capital financing
costs
Pension interest
cost
Deficit on trading
undertakings
Interest payable
Loss on disposal of
non-current assets
Total Operating
Expenses
Surplus(-)/Deficit
on the provision
of services
-0.547
-
-
-
-0.547
-74.191
-74.738
-1.926
-0.150
-
1.036
-1.040
-38.863
-39.903
-0.978
-0.074
-
-
-1.051
-
-1.051
-12.456
-
-
-
-12.456
-
-12.456
-
-
-
-
0.000
-0.035
-0.035
-
-
-
-
0.000
-0.054
-0.054
-
-
-
-
0.000
-3.306
-3.306
-
-
-
-
0.000
-
-
-
-
-
-
0.000
-0.145
-0.145
-15.907
59.277
8.504
-0.224
0.380
0.109
0.000
-12.624
1.036
-
-15.094
59.657
-4.011
-116.594
-
-131.688
59.657
-4.011
0.722
0.002
-
-
0.724
-
0.724
2.840
-
-
-
2.840
-
2.840
1.417
0.019
-
-
1.436
-
1.437
6.037
0.583
-
-2.972
3.648
38.441
4.125
0.243
0.007
-
-
38.684
4.132
0.232
0.002
-
-0.232
0.002
-
-
-
-
0.000
66.994
66.994
-
-
-
-
0.000
6.397
6.397
-
-
-
-
0.000
0.701
0.701
-
-
-
-
0.000
0.007
0.007
121.595
1.345
-12.624
-3.204
107.112
74.099
181.212
105.688
1.121
-12.624
-2.168
92.018
-42.495
49.524
3.648
-
38.684
4.132
0.002
Basis for analysis – The above segments have been identified using the service expenditure
analysis as set out in the Service Reporting Code of Practice (SeRCOP). The segments reported
have been measured on the basis that they individually form 10% or more of the gross
expenditure/income of the net cost of services.
Services not in analysis - This includes services which are less than 10% of gross
income/expenditure in the CI&E Net Cost of Services. In the case of GMFRA for 2014/15 this
37
relates to Fire Service Emergency Planning, Corporate & Democratic Core and Non Distributed
Costs.
Amounts not included in analysis but included in the CI&E - this shows the entries relating to
IAS19.
Amounts included in analysis but not included in the CI&E - this shows the entries relating to
reserve movements and DRFs on revenue committees.
25. Trading operations
Holding Account Balances
The Authority operates support services which can, under the Service Reporting Code of Practice,
be classified as trading activities. The net cost of these activities is allocated in line with
recommended practice across the services on the face of the Comprehensive Income and
Expenditure Statement.
The activities included under central support services are: Finance, Information Technology,
Personnel, Facilities Management and Catering. Contained within these activities is income of
£1.045m which is not recorded on the face of the Comprehensive Income and Expenditure
Statement as income but is contained within the support services allocated under expenditure in
line with recommended practice. The balance of income in the table is recharge income from the
allocation of support to service heads.
The Authority also holds the costs and recovery of income relating to seconded officers under
support services. This is shown separately in the table below.
Surplus/Deficit on Trading Accounts
2013/14
Surplus(-)/Deficit
£’m
-0.203
0.028
6.573
6.398
Central Support
2014/15
Expenditure
£’m
27.116
2014/15
Income
£’m
-27.858
2014/15
Surplus(-)/Deficit
£’m
-0.742
Secondments
Regional Control
Total
0.190
1.150
28.456
-0.197
-28.055
-0.007
1.150
0.401
Included in the table above are payments made on behalf of the Regional Control project. Grants
are received in year to cover this expense with any remaining balance put into reserve for future
expenditure. This does not have an effect on the level of balances held by the Fire Authority.
26. Agency Services
The Authority collects superannuation payments from its employees on behalf of the Greater
Manchester Pension Fund.
The ten Greater Manchester district councils are billing authorities and therefore collect the
precept and business rates on behalf of the Fire Authority. This money is paid over to the
Authority during the year. For 2014/15 the amount of precept paid to the Authority was £49.221m
38
27. Members’ Allowances
The Authority paid the following amounts to members of the Authority during the year.
2013/14
£’m
0.008
0.207
0.012
0.227
Salaries
Allowances
Expenses
Total
2014/15
£’m
0.007
0.200
0.017
0.224
28. Officers’ Remuneration
The number of employees whose remuneration, excluding employer’s pension contributions, was
£50,000 or more in bands of £5,000 were:
Table a)
Number of Employees
Remuneration Band
2013/14
Number of Employees
2014/15
*33
£50,000 - £54,999
21
*26
£55,000 - £59,999
21
*18
*8
£60,000 - £64,999
£65,000 - £69,999
*9
9
3
£70,000 - £74,999
5
*3
£75,000 - £79,999
3
-
£80,000 - £84,999
4
-
£85,000 - £89,999
-
-
£90,000 - £94,999
-
-
£95,000 - £99,999
-
2
£100,000 - £104,999
2
-
£105,000 - £109,999
-
*1
£110,000 - £114,999
-
*1
£115,000 - £119,999
-
2
£120,000 - £124,999
1
-
£125,000 - £129,999
1
-
£130,000 - £134,999
-
1
£135,000 - £139,999
1
-
£140,000 - £164,999
-
1
£165,000 - £169,999
1
99
Total
78
The table above includes senior employees whose information is shown in more detail in table b).
* Includes Redundancy Payments
39
The remuneration paid to the Authority’s senior employees is as follows:
Table b)
Total
Total
Total
Remuneration
Remuneration
Remuneration
including
Salary
excluding
including
pension
(including
pension
pension
contributions
fees &
contributions Pension contributions
2013/14
Post
allowances) Expenses
2014/15
Cont’s
2014/15
£
£
£
£
£
£
Chief Executive & County Fire Officer - whose salary is £150,000 or more per year
200,713
S McGuirk
166,650
-
166,650
35,496
202,146
Corporate Leadership Team whose salary is less than £150,000 but equal or more than £50,000 per year
163,571
Deputy County Fire Officer
131,299
4,534
135,833
27,967
163,800
149,357
Director of Emergency
Response
121,743
4,635
126,378
25,512
151,890
148,183
Director of Prevention &
Protection/ACFO AGMA
Project (Note1)
119,772
3,686
123,458
25,512
148,970
Director of Prevention &
Protection (Note 2)
27,114
410
27,524
100,310
1,725
102,035
20,564
122,599
6,312
33,836
119,926
Director of People &
Organisation Development
120,446
Director of Finance &
Technical Services
99,811
2,711
102,522
20,461
122,983
93,071
Director of Information &
Communications Technology
76,831
3,460
80,291
15,750
96,041
73,425
Deputy Clerk & Authority
Solicitor
60,803
1,652
62,455
12,465
74,920
61,471
Director of Corporate
Communications
67,025
2,259
69,284
13,616
82,900
Note 1 The postholder of Director of Prevention & Protection had 2 roles as noted above during 2014/15.
The AFCO AGMA Project was from 25/03/14 to 30/06/14. The total values for both roles are
shown above as there was no change in salary level.
Note 2 This post was to backfill the Director of Prevention & Protection whilst covering the additional role
in Note 1. Values are for the period from 01/04/14 to 30/06/14. The annual salary for this role is
£114,070
40
Exit Packages
Table c)
Exit Package Cost Band
(including special payments)
Number of
Compulsory
Redundancies
£
2013/14 2014/15
0 - £20,000
£20,001 - £40,000
£40,001 - £60,000
£60,001 - £80,000
£80,001 - £100,000
£100,001 - £150,000
Number of
Other Departures
Agreed
Total Number of
Exit Packages
by Cost Band
Total Cost of
Exit Packages
in Each Band
2013/14
2014/15
2013/14
2014/15
£’m
2013/14 2014/15
-
-
9
11
4
-
9
1
-
9
11
4
-
9
1
-
0.136
0.302
0.198
-
0.084
0.038
-
0
0
24
10
24
10
0.636
0.122
29. External audit costs
The Authority has incurred the following costs in relation to the audit of the Statement of Accounts,
certification of grant claims and statutory inspections and to non-audit services provided by the
Authority’s external auditors:
Fees payable to the external auditors with regard to external audit services carried out
by the appointed auditor for the year
Fees payable to the external auditors for the certification of grant claims and returns
for the year
Fees payable in respect of other services provided by the external auditors during the
year
Total
2013/14
2014/15
£'m
0.053
£'m
0.053
-
-
-
0.007
0.053
0.060
30. Grant income
The Authority credited the following grants, contributions and donations to the Comprehensive
Income and Expenditure Statement in 2014/15:
Credited to Taxation and Non Specific Grant Income
Capital Grants
NW Fire Control Grant
Revenue Support Grant
Localising Council Tax Support Grant
Section 31 Grants
Total
Credited to Services
PFI Grant
Firelink Grant
Urban Search and Rescue Grant
New Dimensions Grant
Local Transparency – CLG
Sustainability - TFGM
Total
2013/14
£’m
3.187
1.906
42.290
0.090
0.283
47.756
2014/15
£’m
3.122
1.261
36.209
0.470
0.715
41.777
2013/14
£’m
0.452
0.184
0.107
0.126
0.869
2014/15
£’m
0.452
0.215
0.108
0.129
0.005
0.010
0.919
41
31. Related Parties
In accordance with International Accounting Standard 24 (IAS24), the Authority is required to
disclose material transactions with related parties. Related parties are bodies or individuals that
have the potential to control or influence the Authority or to be controlled or influenced by the
Authority. Disclosure of these transactions allows readers to assess the extent to which the
Authority might have been constrained in its ability to operate independently or might have
secured the ability to limit another party’s ability to bargain freely with the Authority. This note
exemplifies those transactions between related parties and the Authority.
The related parties of the Authority have been identified as its Members and Chief Officers and
their close relatives, Central Government and the ten Greater Manchester District Authorities
including the administration of pensions on behalf of the Authority.
Central Government
Central Government has significant influence over the general operations of the Authority. It is
responsible for providing the statutory framework within which the Authority operates, provides the
majority of its funding in the form of grants and prescribes the terms of many of the transactions
that the Authority has with other parties. Details of grant transactions with Government
Departments are set out in Note 30 Grant Income.
Members of the Authority
The Authority consists of 30 members, all of whom are councillors appointed by Greater
Manchester's 10 district councils. Members of the Authority have direct control over the
Authority’s financial and operating policies. Each year the Authority invites Members to declare
any such interests including related parties. During 2014/15 there were no reported material
transactions with related parties advised by Members.
Chief Officers
The Authority on an annual basis necessitates Chief Officers to make a declaration of any related
party transactions. There were no reported interests in an organisation that generated a related
party transaction with the Authority in respect of 2014/15.
The Authority receives grants from Central Government and precepts from the Greater
Manchester District Authorities. These transactions are disclosed within the Comprehensive
Income and Expenditure Statement and the Cash Flow Statement.
The Authority makes a number of appointments to outside bodies, principally the Local
Government Association (LGA), and it appoints members to the North West Partnership Board.
The work of the partnership board has been scaled back in 2014/15 and no financial transactions
have taken place.
Under the terms of a Service Level Agreement between the Authority and Wigan Council in
2014/15, Donna Hall, Chief Executive of Wigan, was the Clerk to the Authority, and Paul McKevitt
Wigan's Deputy Chief Executive and Director or Resources and Contracts is the Authority's
Treasurer.
NW FiReControl Limited
NW Fire Control Limited is a company limited by guarantee with the responsibility for Fire and
Rescue Service mobilisation for the North West region. The Company has four members which
are Cheshire, Cumbria, Greater Manchester and Lancashire Fire & Rescue Authorities (FRAs).
42
The liability of each member in the event of the company being wound up is limited and shall not
exceed £1. Each member of the company has the right to appoint 2 directors, who are Councillors
appointed to their respective FRAs. All directors have equal voting rights.
During May 2014 all four services transferred their Control Room functions into the regionalised
service provided by NW Fire Control Ltd. The cost of the service is charged out to the four FRAs
on an agreed pro rata basis agreed by a Service Level Agreement. The implementation phase
continued to be funded by a section 31 grant from the Department for Communities and Local
Government plus an ongoing grant to fund 66% of the lease costs for the building. The grant is
paid to Greater Manchester Fire & Rescue Authority as lead authority for the North West region
and released to the company as required. There have also been contributions to the project from
the four fire authorities.
A detailed assessment for Group Accounting requirements has taken place during 2014/15 in
respect of NW Fire Control Ltd. This is in accordance with the Code of Practice on Local Authority
Accounting in the United Kingdom Based on International Financial Reporting Standards (IFRS
10, 11 & 12).
It has been determined that the company is governed by Joint Control due to the fact that
unanimous consent exists for key decisions and that each Authority has equal voting rights. This
joint arrangement has been deemed to be a Joint Operation as the parties have rights to the
assets, and obligations for the liabilities relating to the arrangement.
However on the basis of materiality it has been determined that Group Accounts are not required
for the financial year 2014/15 having considered both qualitative and quantitative factors, including
the following:






The 25% share of assets, liabilities, income and expenditure are not material against
the balances of GMFRS
Exclusion of the values would not affect the true and fair concept of the financial
statements
The joint control centre was set up to generate savings for the FRAs not because they
could not provide the service. There is a Standby Control Room at Stretford Fire
Station as Business Continuity for NW Fire Control Ltd
There are no concerns regarding commercial risk
No assets have been transferred from the FRAs to NW Fire Control Ltd
The inclusion of Company figures into Group Accounting would not add value to the
reader of the Statement of Accounts
Below shows key Information from draft year-end accounts for NW Fire Control Ltd:
Accounts Information
Total Assets Less Current Liabilities
Net Assets
Profits Before Taxation
Profits After Taxation
Debtor Balance (GMFRS)
Creditor Balance (GMFRS)
Invoices Raised by NW Fire Control to GMFRS
Invoices Raised by GMFRS to NW Fire Control
2013/14
£’m
2014/15
£’m
0.193
0.136
0.063
0.048
0.250
0.668
0.279
1.793
0.217
-2.202
0.002
-0.005
0.025
1.043
1.430
1.111
*Net assets includes the future pension liabilities under FRS17 reported by the Cheshire Pension
Fund actuaries.
All figures are shown net of VAT
Invoices are raised quarterly in advance for the service to the Fire Authorities, the advance
invoices in respect of Quarter 1 2015/16 are excluded from the above figures.
43
Transactions between GMFRS and NW Fire Control Ltd include Invoices Raised by NW Fire
Control to GMFRS for the Control Room service (£1.4m) and use of facilities in the building.
Invoices raised by GMFRS to NW Fire Control Ltd include items purchased on behalf of the
Company as the lead Authority, and charges for services including ICT, Finance and for the
Standby Control Room.
The Company’s Financial Statements can be obtained from Companies House with the deadline
for submission as 31/12/14 for the final audited 2013/14 accounts.
32. Capital expenditure and capital financing
The total amount of capital expenditure incurred in the year is shown in the table below (including
the value of assets acquired under PFI contracts), together with the resources that have been
used to finance it. Where capital expenditure is to be financed in future years by charges to
revenue as assets are used by the Authority, the expenditure results in an increase in the Capital
Financing requirement (CFR), a measure of the capital expenditure incurred historically by the
Authority that has yet to be financed. The CFR is analysed in the second part of this note.
Opening Capital Financing Requirement
Capital Investment
Property, Plant and Equipment
Intangible Assets
Revenue Expenditure Funded from Capital under Statute
Sources of Finance
Government grants and other contributions
Sums set aside from revenue:
Direct revenue contributions
MRP/loans fund principal
Closing Capital Financing Requirement
Explanation of movements in year
Increase/decrease (-) in underlying need to borrowing (unsupported by government
financial assistance)
Increase/decrease (-) in Capital Financing Requirement
2013/14
£’m
41.939
2014/15
£’m
39.286
6.171
0.094
1.931
3.685
0.006
1.001
-4.628
-3.894
-3.568
-2.653
39.286
-0.798
-2.476
36.810
-2.653
-2.476
-2.653
-2.476
33. Leases
The Authority has no assets employed for use in Finance Leases or Hire Purchase Contracts.
Authority as Lessee – Operating Leases
The Authority has a number of operating leases for the provision of photocopiers. The future
minimum lease payments are:
2013/14
Not later than 1 Year
Later than 1 Year and not later than 5 years
later than 5 Years
2014/15
£'m
£'m
0.091
0.086
0.022
0.084
0.274
-
The expenditure during 2014/15 in relation to these leases was £0.097m (£0.107m in 2013/14).
A new contract was awarded with effect from 1 July 2014 for 5 years and the above figures are
based on this. The contract was to provide for a total of 98 MFDs including servicing and
maintenance, and software licence charges. The above figures reflect the fixed contract prices of
£0.021m per quarter payable to Xerox Ltd for the revised contract, which terminates on 30 June
2019.
44
Authority acting as Lessor – Operating Leases
The Authority leases out property for operational reasons. The rent receivable in 2014/15 was
£0.027m; the equivalent sum in 2013/14 was £0.035m.
34. Private Finance Initiatives and similar contracts
2014/15 was the sixteenth year of a 25 year PFI contract (ending October 2024) for the
construction, maintenance and provision of a Fire Station at Stretford, along with associated
equipment.
The contract specifies minimum standards for the services to be provided by the contractor, with
deductions from the fee payable being made if facilities are unavailable or performance is below
the minimum standards. The building and equipment will be transferred to the Authority at the end
of the 25 year contract.
Property Plant and Equipment
The Fire Station and Equipment provided under the contract are recognised on the Authority's
Balance Sheet. Movements in their value over the year are detailed in the analysis of the
movement on the Property Plant and Equipment balance in note 10.
Payments
The Authority makes monthly payments which comprise of a fixed monthly charge, a service
charge, a payment in respect of business rates, and a payment to provide for lifecycle
replacement costs (known as the 'Sinking Fund'). The payments into the sinking fund are treated
initially as a prepayment by the Authority. The Service Provider throughout the contractual term
will utilise the sinking fund for the repair and replacement of the premises and fixture and fittings
with the consent of the Authority. All payments made (other than the fixed monthly charge) are
subject to annual inflation increases.
Payments remaining to be made under the contract as at 31 March 2015 are as follows:
To Service Provider
Payable in 2015/16
Within 2-5 years
Within 6-10 years
Repayment Repayment
of Liability of Interest
Service
Total
Service
Total assumes
Charges Assumes 3% Charges based Service Charges
Assume 3% inflation on
on Current
based on
inflation
service
Prices
Current Prices
charges
£'m
£'m
£'m
£'m
0.139
0.738
1.364
2.241
0.243
0.787
0.384
1.414
0.309
1.300
1.632
3.241
0.691
2.825
3.380
6.896
£'m
0.306
1.224
1.412
2.942
£'m
0.688
2.749
3.160
6.597
The value of the liabilities held under the PFI arrangement are:
Value at 31
March 2014
Liabilities resulting from PFI Contract
£'m
-2.365
Principal
Repayment in
2014/15
£'m
0.124
Value as at 31
March 2015
£'m
-2.241
Under the Code of Practice there is a requirement that the liability reported in the accounts is
measured at fair value. There is a significant difficulty in valuing such a liability due to the
45
absence of an active market and a reliable rate to discount future payments. The Authority at this
time has no intention to refinance the scheme. Therefore, the value reported in the financial
statements is deemed to be the fair value.
Value of Current Assets Held Under PFI
As part of the PFI, contract payments are made by the Authority to the service provider to provide
for lifecycle replacement costs (known as the ‘Sinking Fund’). The payments into the sinking fund
are treated initially as a prepayment by the Authority.
Value at 31 Payments into Payments out of
March 2014 Sinking Fund in sinking fund in
2014/15
2014/15 for
Repair and
Replacement
Sinking Fund (Prepayment Account)
Value as at 31
March 2015
£'m
£'m
£'m
£'m
0.123
0.020
0.023
0.120
Central Government Grant Subsidy
Grant Due to be
Received
£'m
Within 1 year
Within 2-5 years
Within 6-10 years
Within 11-15 years
Total
-0.452
-1.809
-2.148
-4.409
The grant received in the form of Central Government Subsidy to partly offset the cost of PFI is
credited to revenue accounts in the year of receipt.
35. Defined Benefit Pension Schemes
Participation in Pension Schemes
As part of the terms and conditions of employment of its firefighters and other employees, the
Authority makes contributions towards the cost of post employment benefits. Although these
benefits will not actually be payable until employees retire, the Authority has a commitment to
make the payments that need to be disclosed at the time that employees earn their future
entitlement.
The Authority participates in two pension schemes:
The Fire Service Pension Scheme for its uniformed firefighters - this is an unfunded scheme,
meaning that there are no investment assets built up to meet the pensions liabilities, and cash has
to be generated to meet actual pensions payments as they eventually fall due.
The Local Government Pension Scheme for civilian employees - this is a funded scheme,
meaning that the Authority and employees pay its contributions into a fund, calculated at a level
intended to balance the pensions liabilities with investment assets. The cost of retirement benefits
is recognised in the Net Cost of Services when they are earned by employees, rather than when
the benefits are eventually paid as pensions. However, the charge we are required to make
against precept income is based on the cash payable in the year, so the real cost of retirement
benefits is reversed out of the Income and Expenditure Account in the Statement of Movement on
General Fund Balances.
46
Comprehensive Income and Expenditure Statement
2013/14
£'m
LGPS
2013/14
£’m
Fire
2.439
33.470
2.439
33.470
-3.306
4.634
1.328
62.360
62.360
3.767
95.830
-0.414
0.130
0.810
-6.260
-66.790
-5.734
-66.790
-1.967
29.040
2014/15
£'m
LGPS
2014/15
£'m
Fire
2.263
28.150
0.419
2.682
0.010
28.160
-3.328
4.412
1.084
62.870
62.870
3.766
91.030
-5.651
16.782
-0.883
77.270
10.248
77.270
14.014
168.300
Cost of Services:
Current service cost (includes transfer in)
Past service cost (including curtailments)
Total Service Cost
Financing and Investment Income & Expenditure:
Interest income on plan assets
Interest cost on defined benefit obligation
Total Net Interest
Total Post Employment Benefit Charged to the Surplus or Deficit
on the Provision of Services
Remeasurements of the Net Defined Liability Comprising:
Return on plan assets excluding amounts included in net interest
Changes in demographic assumptions
Changes in financial assumptions
Other
Total Remeasurements Recognised in Other in the
Comprehensive Income and Expenditure Statement
Total Post Employment Benefit Charged to the Comprehensive
Income & Expenditure Statement
Movement in the Reserves Statement
2013/14
2013/14
2014/15
2014/15
£'m
LGPS
£'m
Fire
£'m
LGPS
£'m
Fire
-3.767
-95.830
-
2.063
-
46.470
-1.704
-49.360
Reversal of net charges made to the surplus / deficit on the
provision of service
-3.766
Employers' contributions payable to the scheme
Retirement benefits payable to pensioners
Actual amount charged against the General Fund Balance for
Pensions in the year
-91.030
-
2.870
-
48.840
-0.896
-42.190
Pensions Assets and Liabilities Recognised in the Balance Sheet
The amount included in the Balance Sheet arising from the Authority’s obligation in respect of its
defined benefit plans is as follows:
Local Government Pension
Scheme
2014/15
2013/14
Present value of the defined benefit obligation
Fair value of employer assets
Net Liability Arising from the Defined Benefit
Obligation
Fire Fighters Pension Scheme
2013/14
£’m
2014/15
£’m
£’m
£’m
-102.640
77.328
-123.005
86.549
-1,439.040
-
-1,558.500
-
-25.312
-36.456
-1,439.040
-1,558.500
47
The firefighters’ pension liability is split between the following schemes:



Firefighters’ Pension Scheme 1992 liability is £1,465.350m (£1,323.390m in 2013/14)
Firefighters’ Injury Benefit Scheme liability is £49.090m (£81.710m in 2013/14)
Firefighters’ Pension Scheme 2006 liability is £44.060m (£33.940m in 2013/14)
Reconciliation of the present value of the scheme liabilities (Defined Benefit Obligation)
Funded Liabilities: Local
Government Pension Scheme
2013/14
2014/15
£’m
£’m
Opening fair value of scheme liabilities
Current Service Cost
Interest Cost
Contributions from scheme participants
Remeasurement gain
Change in demographic assumptions
Change in financial assumptions
Other
Past Service Costs
Benefits Paid
Closing balance at 31 March
Fire Fighters Pension Scheme
2013/14
£’m
2014/15
£’m
102.766
2.439
4.634
102.640
2.263
4.412
1,456.470
33.470
62.360
1,439.040
28.150
62.870
0.685
0.695
-
-
0.130
0.810
-6.260
-2.564
16.782
-0.883
0.419
-3.323
-66.790
-46.470
77.270
0.010
-48.840
102.640
123.005
1,439.040
1,558.500
Reconciliation of movements in the fair value of the scheme assets
Local Government Pension
Scheme
2013/14
2014/15
£’m
£’m
48
Opening fair value of scheme assets
Interest Income
73.424
3.306
77.328
3.328
Remeasurement gain
Return on assets excluding amounts included in net interest
Contributions from employer
Contributions from employees into the scheme
Benefits Paid
Adjustment to align to actuaries report
Closing fair value of scheme assets
0.414
2.063
0.685
-2.564
77.328
5.651
2.870
0.695
-3.323
86.549
Local Government Pension Scheme assets comprised:
Period Ended 31 March
2014
Quoted
prices in Percentage
active
of Total
markets
Assets
£’m
Period Ended 31 March
2015
Quoted
prices in Percentage
active
of Total
markets
Assets
%
£’m
%
Equity Securities
Consumer
Manufacturing
Energy and utilities
Financial Institutions
Health and care
Information Technology
Other
8.147
7.474
6.832
9.443
3.308
1.504
1.178
11
10
9
12
4
2
2
8.700
8.097
7.240
10.254
4.090
1.742
1.089
10
9
8
12
5
2
1
Debt Securities
Corporate bonds (investment grade)
UK Government
Other
4.597
1.289
2.680
6
2
3
5.100
0.805
4.280
6
1
5
Private Equity
All
1.909
2
2.405
3
Real Estate
UK Property
2.278
3
2.396
3
14.830
4.091
0.546
3.116
19
5
1
4
15.980
4.800
0.950
5.398
18
6
1
6
Derivatives
Other
1.056
1
0.966
1
Cash and Cash Equivalents
All
3.050
4
2.257
3
77.328
100
86.549
100
Investment Funds and Unit Trusts
Equities
Bonds
Infrastructure
Other
Totals
49
Basis for Estimating Assets and Liabilities
Liabilities have been assessed on an actuarial basis using the projected unit method, an estimate
of the pensions that will be payable in future years dependent on assumptions about mortality
rates, salary levels etc.
The Local Government Pension Scheme has been estimated by Hymans Robertson LLP, an
independent firm of actuaries, estimates for the administering authority being based on the latest
full valuation of the scheme as at 1 April 2014. The Firefighters Pension Scheme has been
assessed by the Government Acutary Department (GAD).
The significant assumptions used by the actuary have been:
Mortality Assumptions
2013/14
LGPS
2013/14
Fire
21.4 years
24.0 years
23.5 years
25.5 years
24.0 years
26.6 years
26.6 years
28.6 years
2.8%
3.9%
2.8%
4.3%
55.0%
2.5%
4.5%
2.5%
4.4%
-
Longevity at 65 for current pensioners:*
Male
Female
Longevity at 65 for future pensioners:*
Male
Female
Rate of Inflation (Price Increases)
Rate of increase in salaries (Salary Increases)
Rate of increase in pensions (Pension Increases)
Rate of discounting scheme liabilities (Discount Rate)
Take up of option to convert annual pension into retirement grant
2014/15
LGPS
2014/15
Fire
21.4 years
24.0 years
22.5 years
22.5 years
24.0 years
26.6 years
24.8 years
24.8 years
2.4%
3.6%
2.4%
3.2%
55%
2.2%
4.2%
2.2%
3.3%
-
*Life Expectancy is based on the Fund’s VitaCurves.
An allowance is included for future retirements to elect to take 55% of the maximum additional tax
free cash up to the HRMC limits for pre-April 2008 service and 80% of the maximum tax-free cash
for post-April 2008 service.
The estimation of the defined benefit obligations is sensitive to the actuarial assumptions set out in
the table above. The sensitivity analyses below have been determined based on reasonably
possible changes of the assumptions occurring at the end of the reporting period and assumes for
each change that the assumption analysed changes while all the other assumptions remain
constant. The assumptions in longevity, for example, assume that life expectancy increases or
decreases for men and women. In practice, this is unlikely to occur, and changes in some
assumptions may be interrelated. The estimations in the sensitivity analysis have followed the
accounting policies for the scheme, i.e. on an actuarial basis using the projected unit credit
method. The methods and types of assumptions used in preparing the sensitivity analysis below
did not change from those used in the previous period.
Local Government Pension Scheme
Change in Assumption at 31 March 2015
0.5% decrease in Real Discount Rate
1 year increase in member life expectancy
0.5% increase in the Salary Increase Rate
0.5% increase in the Pension Increase Rate
50
Approximate % increase to Approximate monetary
Employer Liability
amount
£’m
11%
3%
3%
7%
13.313
3.690
4.181
8.862
The weighted average duration of the defined benefit obligation for scheme members is
approximately 18.6 years.
The Authority anticipates paying £2.264m contributions to the scheme in 2015/16.
Fire Fighters Pension Scheme (1992 scheme)
Change in Assumption at 31 March 2015
0.5% decrease in Real Discount Rate
1 year increase in member life expectancy
0.5% increase in the Salary Increase Rate
0.5% increase in the Pension Increase Rate
Approximate % increase to
Employer Liability
10.7%
2.5%
1.2%
9.1%
Approximate monetary
amount
£’m
157.000
36.000
18.000
133.00
The weighted average duration of the defined benefit obligation for scheme members is
approximately 21 years.
Fire Fighters Pension Scheme (2006 scheme)
Change in Assumption at 31 March 2015
0.5% decrease in Real Discount Rate
1 year increase in member life expectancy
0.5% increase in the Salary Increase Rate
0.5% increase in the Pension Increase Rate
Approximate % increase to
Employer Liability
Approximate monetary
amount
£’m
20.5%
2.0%
10.0%
9.3%
9.000
0.900
4.400
4.100
The weighted average duration of the defined benefit obligation for scheme members is
approximately 38 years.
Impact on Authority’s cash flow – Local Government Pension Scheme
The objectives of the scheme are to keep employers contributions at as constant a rate as
possible and agree a funding strategy to ensure future employers contributions meet the
Administering Authority’s funding objectives. Following the latest triennial valuation the LGPS has
been assessed as being 90.5% funded. Funding levels are monitored on an annual basis. The
next triennial valuation is due to be completed 31 March 2016.
The scheme will need to take account of the national changes to the scheme under the Public
Pensions Services Act 2013. Under the Act, the Local Government Pension Scheme in England
and Wales and other main existing public service schemes may not provide benefits in relation to
service after 31 March 2014 (or service after 31 March 2015 for other main existing public service
pension schemes in England and Wales). The Act provides for scheme regulations to be made
within a common framework. A new career average revalued earnings schemes to pay pensions
and other benefits has been established.
36. Contingent liabilities
Municipal Mutual Insurance Limited (MMI)
The scheme of arrangement was triggered in 2012/13. In effect an initial levy of 15% has been
paid during 2013/14 and included within the Insurance Provision. However, as the impact on the
Authority as a scheme creditor is not clear in regards to the potential impact of future unknown
claims incurred but not reported between 1974 and 1992, there is a risk that the financial liability
could increase beyond that currently provided for.
51
Pension Fund
With regard to pension costs, the risk relates to on call firefighters being allowed to retrospectively
join the Firefighters pension scheme. DCLG has determined that the costs of the employer
contributions will be met through future scheme valuations, which will calculate levels of employer
and employee contribution. This will impact on the Authority’s IAS19 position in relation to its
outstanding liabilities in future years, and may impact on its Comprehensive Income and
Expenditure Account.
A recent court ruling means that the Authority has a risk in relation to being required to meet back
dated revised lump sum and pension costs of firefighters who retired between 2001 and 2006. A
reliable estimate cannot reasonably be provided at this stage due to the complexity of the
calculations, however an initial high level review suggests that the payments could be in the region
of £5m. The costs once fully assessed will be funded by DCLG in the form of additional top-up
grant.
37. Publicity Expenditure
Set out below, in accordance with S.5(1) of the Local Government Act 1986 and the Local
Authorities (Publicity Account) (Exemption) Order 1987, is the Authority's spending on publicity.
Other Publicity encompasses the cost of providing corporate communications for the Authority,
which includes expenditure on campaigns, events and other commercial activity.
2013/14
2014/15
£'m
£'m
0.068
Recruitment Advertising
0.065
0.634
Other Publicity
0.638
0.702
Total
0.703
38. Pension Fund Account
There is a requirement in the IFRS Code to create a Pension Fund Account and Net Assets
Statement in respect of the Fire-fighter’s Pension Scheme. The primary objective is to separate
the cost of providing pensions from the cost of running a Fire and Rescue Service. Therefore,
any accruals created relating to the Pension Fund are removed from the Balance Sheet and a
corresponding entry created to recognise the relationship with the Pension Fund Account.
39. Accounting Policies
General Principles
The Statement of Accounts summarises the Authority’s transactions for the 2014/15 financial year
and its position at the year-end of 31 March 2015. The Authority is required to prepare an annual
Statement of Accounts by the Accounts and Audit (England) Regulations 2011. These regulations
require the Accounts to be prepared in accordance with proper accounting practices. These
practices primarily comprise the Code of Practice on Local Authority Accounting in the United
Kingdom 2014/15 and the Service Reporting Code of Practice 2014/15, supported by International
Financial Reporting Standards (IFRS) and statutory guidance issued under section 12 of the 2003
Act.
The accounting convention adopted in the Statement of Accounts is principally historical cost,
modified by the revaluation of certain categories of non-current assets and financial instruments.
Accruals of Income and Expenditure
Activity is accounted for in the year that it takes place, not simply when cash payments are
made or received. In particular:
52

Revenue from the sale of goods is recognised when the Authority transfers the significant
risks and rewards of ownership to the purchaser and it is probable that economic benefits
or service potential associated with the transaction will flow to the Authority.

Revenue from the provision of services is recognised when the Authority can measure reliably
the percentage of completion of the transaction and it is probable that economic benefits or
service potential associated with the transaction will flow to the Authority.

Supplies are recorded as expenditure when they are consumed – where there is a gap
between the date supplies are received and their consumption, they are carried as inventories
on the Balance Sheet.

Expenses in relation to services received (including services provided by employees) are
recorded as expenditure when the services are received rather than when payments are
made.

Interest receivable on investments and payable on borrowings is accounted for respectively as
income and expenditure on the basis of the effective interest rate for the relevant financial
instrument rather than the cash flows fixed or determined by the
contract.

Where revenue and expenditure have been recognised but cash has not been received or
paid, a debtor or creditor for the relevant amount is recorded in the Balance Sheet. Where
debts may not be settled, the balance of debtors is written down and a charge made to
revenue for the income that might not be collected.
Cash and Cash Equivalents
Cash is represented by cash in hand and deposits with financial institutions repayable without
penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that
mature in no more than three months from the balance sheet date and that are readily convertible
to known amounts of cash with insignificant risk of change in value.
In the Cash Flow Statement, cash and cash equivalents are shown net of bank overdrafts that are
repayable on demand and form an integral part of the Authority’s cash management.
Charges to Revenue for Non Current Assets
Service revenue accounts, support services and trading accounts are debited with the following
amounts to record the cost of holding non-current assets during the year:

depreciation attributable to the assets used by the relevant service.

revaluation and impairment losses used by the service where there are no accumulated gains
in the Revaluation Reserve against which they can be written off.

amortisation of intangible assets attributable to the service.
Minimum Revenue Provision
The Authority is not required to raise Precept to cover depreciation, revaluation and impairment
losses or amortisation. However, it is required to make an annual provision from revenue to
contribute towards the reduction in its overall borrowing requirement. This should be equal to
either:-
53
an amount calculated on a prudent basis determined by the Authority in accordance with statutory
guidance, or loans funded principal charges
or:
equal to at least 4% of the underlying amount measured by the adjusted Capital Financing
Requirement.
Depreciation, revaluation and impairment losses and amortisation are therefore replaced by
revenue provision in the General Fund Balance, by way of an adjusting transaction within the
Capital Adjustment Account for the difference between the two.
Overheads and Support Services
The costs of overheads and support services are charged to those service areas that benefit from
the supply or service in accordance with the costing principles of the CIPFA Service Reporting
Code of Practice 2014/15. The total absorption costing principle is used – the full cost of
overheads and support services are shared between users in proportion to the benefits received,
with the exception of:


Corporate and Democratic Core – costs relating to the Authority’s status as a multi-functional,
democratic organisation.
Non Distributed Costs – the cost of discretionary benefits awarded to employees retiring early
and any depreciation or impairment losses chargeable to non-operational properties.
These two cost categories are accounted for as separate headings in the Comprehensive Income
and Expenditure Statement, as part of the Net Expenditure on Continuing Services.
Employee Benefits
Benefits Payable During Employment
Short-term employee benefits are those due to be settled within 12 months of the year-end. They
include such benefits as wages and salaries, paid annual leave and paid sick leave, bonuses and
non-monetary benefits (eg cars) for current employees, and are recognised as an expense for
services in the year in which employees render service to the Authority. An accrual is made for the
cost of holiday entitlements (or any form of leave, eg time off in lieu) earned by employees but not
taken before the year-end which employees can carry forward into the next financial year. The
accrual is made at the wage and salary rates applicable in the following accounting year, being the
period in which the employee takes the benefit. The accrual is charged to Surplus or Deficit on the
Provision of Services, but then reversed out through the Movement in Reserves Statement so that
holiday benefits are charged to the General Fund in the financial year in which the holiday
absence occurs.
Termination Benefits
Termination benefits are amounts payable as a result of a decision by the Authority to terminate
an officer’s employment before the normal retirement date or an officer’s decision to accept
voluntary redundancy. These are charged on an accruals basis to the appropriate service in the
Comprehensive Income and Expenditure Statement when the Authority is demonstrably
committed to the termination of the employment of an officer or group of officers or making an
offer to encourage voluntary redundancy.
Where termination benefits involve the enhancement of pensions, statutory provisions require the
General Fund balance to be charged with the amount payable by the Authority to the pension fund
or pensioner in the year, not the amount calculated according to the relevant accounting
54
standards. In the Movement in Reserves Statement, appropriations are required to and from the
Pensions Reserve to remove the notional debits and credits for pension enhancement termination
benefits and replace them with debits for the cash paid to the pension fund and pensioners and
any such amounts payable but unpaid at the year-end.
Events After the Reporting Period
Events after the Reporting Period date are those events, both favourable and unfavourable, that
occur between the end of the reporting period and the date when the Statement of Accounts is
authorised for issue. Two types of events can be identified:


those that provide evidence of conditions that existed at the end of the reporting period – the
Statement of Accounts is adjusted to reflect such events.
those that are indicative of conditions that arose after the reporting period – the Statement of
Accounts is not adjusted to reflect such events, but where a category of events would have a
material effect, disclosure is made in the notes of the nature of the events and their estimated
financial effect. Events taking place after the date of authorisation for issue are not reflected in
the Statement of Accounts.
Financial Instruments
Financial Assets
Financial assets are classified into two types:

loans and receivables – assets that have fixed or determinable payments but are not
quoted in an active market.

available-for-sales assets that have a quoted market price and/or do not have fixed or
determinable payments.
Loans and Receivables
Loans and receivables are assets that have fixed or determinable payments that are not quoted in
an active market. They are recognised on the Balance Sheet when the Authority becomes a party
to the contractual provisions of a financial instrument and are initially measured at fair value. They
are subsequently measured at their amortised cost.
Available-for-Sale Assets
Available-for-sale assets are recognised on the Balance Sheet when the Authority becomes a
party to the contractual provisions of a financial instrument and are initially measured and carried
at fair value. Where the asset has fixed or determinable payments, annual credits to the Financing
and Investment Income and Expenditure line in the Comprehensive Income and Expenditure
Statement for interest receivable are based on the amortised cost of the asset multiplied by the
effective rate of interest for the instrument. Where there are no fixed or determinable payments,
income (eg dividends) is credited to the Comprehensive Income and Expenditure Statement when
it becomes receivable by the Authority. Assets are maintained in the Balance Sheet at fair value.
Values are based on the following principles:



instruments with quoted market prices – the market price
other instruments with fixed and determinable payments – discounted cash flow analysis
equity shares with no quoted market prices – independent appraisal of company
valuations.
55
Changes in fair value are balanced by an entry in the Available-for-Sale Reserve and the gain/
loss is recognised in the Surplus or Deficit on Revaluation of Available-for-Sale Financial Assets.
The exception is where impairment losses have been incurred – these are debited to the
Financing and Investment Income and Expenditure line in the Comprehensive Income and
Expenditure Statement, along with any net gain or loss for the asset accumulated in the Availablefor-Sale Reserve.
Where assets are identified as impaired because of a likelihood arising from a past event that
payments due under the contract will not be made (fixed or determinable payments) or fair value
falls below cost, the asset is written down and a charge made to the Financing and Investment
Income and Expenditure line in the Comprehensive Income and Expenditure Statement. If the
asset has fixed or determinable payments, the impairment loss is measured as the difference
between the carrying amount and the present value of the revised future cash flows discounted at
the asset’s original effective interest rate. Otherwise, the impairment loss is measured as any
shortfall of fair value against the acquisition cost of the instrument (net of any principal repayment
and amortisation).
Any gains and losses that arise on the derecognition of the asset are credited or debited to the
Financing and Investment Income and Expenditure line in the Comprehensive Income and
Expenditure Statement, along with any accumulated gains or losses previously recognised in the
Available-for-Sale Reserve. Where fair value cannot be measured reliably, the instrument is
carried at cost (less any impairment losses).
Financial Liabilities
Financial liabilities are recognised on the Balance Sheet when the Authority becomes a party to
the contractual provisions of a financial instrument and are initially measured at fair value and are
carried at their amortised cost. Annual charges to the Financing and Investment Income and
Expenditure line in the Comprehensive Income and Expenditure Statement for interest payable
are based on the carrying amount of the liability, multiplied by the effective rate of interest for the
instrument. The effective interest rate is the rate that exactly discounts estimated future cash
payments over the life of the instrument to the amount at which it was originally recognised. For
most of the borrowings that the Authority has, this means that the amount presented in the
Balance Sheet is the outstanding principal repayable; and interest charged to the Comprehensive
Income and Expenditure Statement is the amount payable for the year according to the loan
agreement.
Government Grants and Contributions
Whether paid on account, by instalments or in arrears, government grants and third party
contributions and donations are recognised as due to the Authority when there is reasonable
assurance that:


the Authority will comply with the conditions attached to the payments, and
the grants or contributions will be received.
Amounts recognised as due to the Authority are not credited to the Comprehensive Income and
Expenditure Statement until conditions attached to the grant or contribution have been satisfied.
Conditions are stipulations that specify that the future economic benefits or service potential
embodied in the asset in the form of the grant or contribution are required to be consumed by the
recipient as specified, or future economic benefits or service potential must be returned to the
transferor.
Monies advanced as grants and contributions for which conditions have not been satisfied are
carried in the Balance Sheet as creditors. When conditions are satisfied, the grant or contribution
is credited to the relevant service line (attributable revenue grants and contributions) or Taxation
56
and Non-Specific Grant Income (non-ringfenced revenue grants and all capital grants) in the
Comprehensive Income and Expenditure Statement.
Where capital grants are credited to the Comprehensive Income and Expenditure Statement, they
are reversed out of the General Fund Balance in the Movement in Reserves Statement. Where
the grant has yet to be used to finance capital expenditure, it is posted to the Capital Grants
Unapplied reserve. Where it has been applied, it is posted to the Capital Adjustment Account.
Amounts in the Capital Grants Unapplied reserve are transferred to the Capital Adjustment
Account once they have been applied to fund capital expenditure.
Group Accounts
The Authority is required to produce group accounts where it has interests in subsidiaries,
associates and/or joint ventures unless interest is considered not material. The group boundary is
dependent upon the extent of the Authority’s control or significant influence over the entity which is
based on the requirements of IFRS10 and IAS 28.
Interests in subsidiaries require consolidation by including items of assets, liabilities, reserves,
income and expenses line by line to those of other group members. Intragroup balances and
transactions are eliminated. Associates and/or Joint ventures are incorporated into group accounts
using the equity method ie bring the investment into group balance sheet at cost and then adjust
the carrying value by the change in the share of the associate’s or joint venture’s net assets. In
addition, a share of profits and losses is included in the group comprehensive income and
expenditure statement.
Joint Arrangements
Joint Arrangements are arrangements by which two or more parties have joint control bound by
contract. Joint control exists only when decisions about the relevant activities require the
unanimous consent of the parties sharing control. A Joint Arrangement can be classed as


A Joint Venture
A Joint Operation
The classification depends upon the rights and obligations of the parties to the arrangement.
Joint Venture
A Joint Venture is an arrangement by which the parties that have joint control of the arrangement
have rights to the net assets of the arrangement. Where material, interests in Joint Ventures
require group accounts to be prepared using the equity method.
Joint Operation
A Joint Operation is an arrangement by which the parties that have joint control of the
arrangement have the rights to the assets and obligations for the liabilities relating to the
arrangement. Where material, interests in Joint Operations are recognised in the single entity
financial statements by including share of assets, liabilities, revenue and expenses held/incurred
jointly.
Inventories and Long Term Contracts
Inventories are included in the Balance Sheet at the lower of cost and net realisable value. The
cost of inventories is assigned using the weighted average costing formula.
57
Long term contracts are accounted for on the basis of charging the Surplus or Deficit on the
Provision of Services with the value of works and services received under the contract during the
financial year.
Intangible Assets
Expenditure on non-monetary assets that do not have physical substance but are controlled by the
Authority as a result of past events (eg software licences) is capitalised when it is expected that
future economic benefits or service potential will flow from the intangible asset to the Authority.
Intangible assets are measured initially at cost. Amounts are only revalued where the fair value of
the assets held by the Authority can be determined by reference to an active market. In practice,
no intangible asset held by the Authority meets this criterion, and they are therefore carried at
amortised cost. The depreciable amount of an intangible asset is amortised over its useful life to
the relevant service line(s) in the Comprehensive Income and Expenditure Statement. An asset is
tested for impairment whenever there is an indication that the asset might be impaired – any
losses recognised are posted to the relevant service line(s) in the Comprehensive Income and
Expenditure Statement. Any gain or loss arising on the disposal or abandonment of an intangible
asset is posted to the Other Operating Expenditure line in the Comprehensive Income and
Expenditure Statement.
Leases
Leases are classified as finance leases where the terms of the lease transfer substantially all the
risks and rewards incidental to ownership of the property, plant or equipment from the lessor to the
lessee. All other leases are classified as operating leases.
The Authority as Lessee
Operating Leases
Rentals paid under operating leases are charged to the Comprehensive Income and Expenditure
Statement as an expense of the services benefiting from use of the leased property, plant or
equipment. Charges are made on a straight-line basis over the life of the lease, even if this does
not match the pattern of payments (eg there is a rent-free period at the commencement of the
lease).
The Authority as Lessor
Operating Leases
Where the Authority grants an operating lease over a property or an item of plant or equipment,
the asset is retained in the Balance Sheet. Rental income is credited to service the Other
Operating Expenditure line in the Comprehensive Income and Expenditure Statement. Credits are
made on a straight-line basis over the life of the lease, even if this does not match the pattern of
payments (eg there is a premium paid at the commencement of the lease). Initial direct costs
incurred in negotiating and arranging the lease are added to the carrying amount of the relevant
asset and charged as an expense over the lease term on the same basis as rental income.
Pensions
Employees of the Authority are divided between two separate pension schemes: The Fire Service
Pension Scheme for its uniformed firefighters and the Local Government Pension Scheme for its
civilian staff.
58
In accordance with proper practices the Authority has within its Statement of Accounts for 2013/14
fully complied with the International Financial Reporting Standard IAS19 (Employee Benefits).
Both Pension schemes are classified as ‘defined benefit’ schemes under IAS19 and the
accounting principles and their effect on the Financial Statements are explained below.
The Fire Service Pension Scheme
This is an unfunded scheme, which is administered by the Authority in accordance with CLG
regulations. For such schemes as there are no investment assets, the IAS19 requires recognition
of the liability and pension reserve in the Balance Sheet and transactions in the Income and
Expenditure Account for movements in the liability and reserve. The primary objective is to allow
the separation of the cost of providing pensions from the cost of running a fire and rescue service.
The Local Government Pension Scheme
The Local Government Scheme is accounted for as a defined benefits scheme:
The liabilities of the Greater Manchester pension GMPF scheme attributable to the Authority are
included in the balance sheet on an actuarial basis using the projected unit method. This is an
assessment of the future payments that will be made in relation to retirement benefits earned to
date by employees, based on assumptions about mortality rates, employee turnover rates, etc,
and projections of projected earnings for current employees. Liabilities are discounted to their
value at current prices, (based on the indicative rate of return on high quality corporate bonds).
The assets of the GMPF attributable to the Authority are included in the balance sheet at their fair
value:




quoted securities – current bid price
unquoted securities – professional estimate
utilised securities – current bid price
property – market value
The change in the net pensions liability is analysed into seven components:
i.
current service cost – the increase in liabilities as a result of years of service earned this
year. This is allocated in the Comprehensive Income and Expenditure Statement to the
revenue accounts of services for which the employees worked.
ii. past service cost – the increase in liabilities arising from current year decisions whose effect
relates to years of service earned in earlier years. This is debited to the surplus or deficit on
the provision of services in the Comprehensive Income and Expenditure Statement as part of
Non Distributed Costs.
Under IAS19 any obligation arising from other long-term employee benefits that depend on
length of service need to be recognised when service is rendered, which for the Authority now
includes Injury Awards.
iii. interest cost – the expected increase in the present value of liabilities during the year as they
move one year closer to being paid. This is debited to Financing and Investment Income and
Expenditure Line in the Comprehensive Income and Expenditure Statement.
iv. expected return on assets – the annual investment return on the fund assets attributable to
the Authority, based on an average of the expected long-term return. This is credited to
Financing and Investment Line in the Comprehensive Income and Expenditure Statement.
59
v. gains/losses on settlements and curtailments – the result of actions to relieve the Authority
of liabilities or events that reduce the expected future service or accrual of benefits of
employees. This is debited or credited to the surplus or deficit on the provision of services in
the Comprehensive Income and Expenditure Statement as part of Non Distributed Costs.
vi. actuarial gains and losses – changes in the net pensions liability that arise because events
have not coincided with assumptions made at the last actuarial valuation or because the
actuaries have updated their assumptions – debited to the Pensions Reserve.
vii. contributions paid to the pension fund – cash paid as employer’s contributions to the fund.
In relation to retirement benefits, statutory provisions require the General Fund balance to be
charged with the amount payable by the Authority to the pension fund or directly to pensioners in
the year, not the amount calculated according to the relevant accounting standards. In the
Movement in Reserves Statement, this means that there are appropriations to and from the
Pensions Reserve to remove the notional debits and credits for retirement benefits and replace
them with debits for the cash paid to the pension fund and pensioners and any such amounts
payable but unpaid at the year-end. The negative balance that arises on the Pensions Reserve
thereby measures the beneficial impact to the General Fund of being required to account for
retirement benefits on the basis of cash flows rather than as benefits are earned by employees.
Discretionary Benefits
The Authority also has restricted powers to make discretionary awards of retirement benefits in the
event of early retirements. Any liabilities estimated to arise as a result of an award to any member
of staff are accrued in the year of the decision to make the award and accounted for using the
same policies that are applied to the Local Government Pension Scheme.
Prior Period Adjustments, Changes in Accounting Policies and Estimates and Errors
Prior period adjustments may arise as a result of a change in accounting policies or to correct a
material error. Changes in accounting estimates are accounted for prospectively, ie in the current
and future years affected by the change and do not give rise to a prior period adjustment.
Changes in accounting policies are only made when required by proper accounting practices or
the change provides more reliable or relevant information about the effect of transactions, other
events and conditions on the Authority’s financial position or financial performance. Where a
change is made, it is applied retrospectively (unless stated otherwise) by adjusting opening
balances and comparative amounts for the prior period as if the new policy had always been
applied. Material errors discovered in prior period figures are corrected retrospectively by
amending opening balances and comparative amounts for the prior period.
Provisions, Contingent Liabilities and Contingent Assets
Provisions
Provisions are made where an event has taken place that gives the Authority a legal or
constructive obligation that probably requires settlement by a transfer of economic benefits or
service potential, and a reliable estimate can be made of the amount of the obligation. For
instance, the Authority may be involved in a court case that could eventually result in the making
of a settlement or the payment of compensation. Provisions are charged as an expense to the
appropriate service line in the Comprehensive Income and Expenditure Statement in the year that
the authority becomes aware of the obligation, and are measured at the best estimate at the
balance sheet date of the expenditure required to settle the obligation, taking into account relevant
risks and uncertainties.
When payments are eventually made, they are charged to the provision carried in the Balance
Sheet. Estimated settlements are reviewed at the end of each financial year – where it becomes
60
less than probable that a transfer of economic benefits will now be required (or a lower settlement
than anticipated is made), the provision is reversed and credited back to the relevant service.
Where some or all of the payment required to settle a provision is expected to be recovered from
another party (eg from an insurance claim), this is only recognised as income for the relevant
service if it is virtually certain that reimbursement will be received if the authority settles the
obligation.
Contingent Liabilities
A contingent liability arises where an event has taken place that gives the Authority a possible
obligation whose existence will only be confirmed by the occurrence or otherwise of uncertain
future events not wholly within the control of the authority. Contingent liabilities also arise in
circumstances where a provision would otherwise be made but either it is not probable that an
outflow of resources will be required or the amount of the obligation cannot be measured reliably.
Contingent liabilities are not recognised in the Balance Sheet but disclosed in a note to the
accounts.
Revenue Expenditure Funded from Capital under Statute (REFCUS)
Expenditure incurred during the year that may be capitalised under statutory provisions but does
not result in the creation of a non-current fixed assets has been charged to the relevant service
account in the year. Where the Authority has determined to meet the cost of this expenditure from
existing capital resources or by borrowing, a transfer in the Movement in Reserves Statement from
the General Fund Balance to the Capital Adjustment Account then reverses out the amounts so
there is no impact on the level of Precept.
Reserves
The Authority sets aside specific amounts as reserves for future policy purposes or to cover
contingencies. Reserves are created by appropriating amounts out of the General Fund Balance
in the Movement in Reserves Statement. When expenditure to be financed from a reserve is
incurred, it is charged to the appropriate service in that year to score against the Surplus and
Deficit on the Provision of Services in the Comprehensive Income and Expenditure Statement.
The reserve is then appropriated back into the General Fund Balance in the Movement in
Reserves Statement so that there is no net charge against Council Tax for the expenditure.
Certain reserves are kept to manage the accounting processes for non-current assets, financial
instruments and retirement and employee benefits and they do not represent usable resources for
the Authority.
Property, Plant and Equipment
Assets that have physical substance and are held for use in the production or supply of goods or
services, for rental to others, or for administrative purposes and that are expected to be used
during more than one financial year are classified as Property, Plant and Equipment.
Recognition
Expenditure on the acquisition, creation or enhancement of Property, Plant and Equipment is
capitalised on an accruals basis, provided that it is probable that the future economic benefits or
service potential associated with the item will flow to the Authority and the cost of the item can be
measured reliably. A deminimis level of £6,000 is in place for the capitalisation of expenditure.
Repairs expenditure that maintains but does not add to an asset’s potential to deliver future
economic benefits or service potential (ie repairs and maintenance) is charged as an expense
when it is incurred.
61
Measurement
Assets are initially measured at cost, comprising:


the purchase price
any costs attributable to bringing the asset to the location and condition necessary for it
to be capable of operating in the manner intended by management
The Authority does not capitalise borrowing costs incurred whilst assets are under
construction.
The cost of an asset acquired other than by purchase is deemed to be its fair value, unless the
acquisition does not have commercial substance (ie it will not lead to a variation in the cash flows
of the Authority). In the latter case, where an asset is acquired via an exchange, the cost of the
acquisition is the carrying amount of the asset given up by the Authority.
Donated assets are measured initially at fair value. The difference between fair value and any
consideration paid is credited to the Taxation and Non-Specific Grant Income line of the
Comprehensive Income and Expenditure Statement, unless the donation has been made
conditionally. Until conditions are satisfied, the gain is held in the Donated Assets Account. Where
gains are credited to the Comprehensive Income and Expenditure Statement, they are reversed
out of the General Fund Balance to the Capital Adjustment Account in the Movement in Reserves
Statement.
Assets are then carried in the Balance Sheet using the following measurement bases:



community assets and assets under construction – depreciated historical cost
vehicles, plant, furniture & equipment – depreciated historical cost
all other assets – fair value, determined as the amount that would be paid for the asset in its
existing use (existing use value – EUV).
Where there is no market-based evidence of fair value because of the specialist nature of an
asset, depreciated replacement cost (DRC) is used as an estimate of fair value.
Assets included in the Balance Sheet at fair value are revalued sufficiently regularly to ensure that
their carrying amount is not materially different from their fair value at the year-end, but as a
minimum every five years. Increases in valuations are matched by credits to the Revaluation
Reserve to recognise unrealised gains after any reversals of previous losses have been credited
to the Surplus or Deficit on the Provision of Services.
Where decreases in value are identified, they are accounted for by:


where there is a balance of revaluation gains for the asset in the Revaluation Reserve, the
carrying amount of the asset is written down against that balance (up to the amount of the
accumulated gains)
where there is no balance in the Revaluation Reserve or an insufficient balance, the carrying
amount of the asset is written down against the relevant service line(s) in the Comprehensive
Income and Expenditure Statement.
The Revaluation Reserve contains revaluation gains recognised since 1 April 2007 only, the date
of its formal implementation. Gains arising before that date have been consolidated into the
Capital Adjustment Account.
62
Impairment
Assets are assessed at each year-end as to whether there is any indication that an asset may be
impaired. Where indications exist and any possible differences are estimated to be material, the
recoverable amount of the asset is estimated and, where this is less than the carrying amount of
the asset, an impairment loss is recognised for the shortfall. Where impairment losses are
identified, they are accounted for by:

where there is a balance of revaluation gains for the asset in the Revaluation Reserve, the
carrying amount of the asset is written down against that balance (up to the amount of the
accumulated gains)

where there is no balance in the Revaluation Reserve or an insufficient balance, the carrying
amount of the asset is written down against the relevant service line(s) in the Comprehensive
Income and Expenditure Statement.
Where an impairment loss is reversed subsequently, the reversal is credited to the relevant
service line(s) in the Comprehensive Income and Expenditure Statement, up to the amount of the
original loss, adjusted for depreciation that would have been charged if the loss had not been
recognised.
Disposals & Non Current Assets Held For Sale
When it becomes probable that the carrying amount of an asset will be recovered principally
through a sale transaction rather than through its continuing use, it is reclassified as an Asset Held
for Sale. The asset is revalued immediately before reclassification and then carried at the lower of
this amount and fair value less costs to sell. Where there is a subsequent decrease to fair value
less costs to sell, the loss is posted to the Other Operating Expenditure line in the Comprehensive
Income and Expenditure Statement. Gains in fair value are recognised only up to the amount of
any previously recognised losses in the Surplus or Deficit on Provision of Services.
Depreciation is not charged on Assets Held for Sale. If assets no longer meet the criteria to be
classified as Assets Held for Sale, they are reclassified back to non-current assets and valued at
the lower of their carrying amount before they were classified as held for sale; adjusted for
depreciation, amortisation or revaluations that would have been recognised had they not been
classified as Held for Sale, and their recoverable amount at the date of the decision not to sell.
Amounts received for a disposal in excess of £10,000 are categorised as capital receipts. The
balance of receipts is required to be credited to the Capital Receipts Reserve, and can then only
be used for new capital investment [or set aside to reduce the Authority’s underlying need to
borrow (the capital financing requirement) (England and Wales)]. Receipts are appropriated to the
Reserve from the General Fund Balance in the Movement in Reserves Statement.
The written-off value of disposals is not a charge against precept, as the cost of non-current
assets is fully provided for under separate arrangements for capital financing. Amounts are
appropriated to the Capital Adjustment Account from the General Fund Balance in the Movement
in Reserves Statement.
Depreciation
Depreciation is provided for on all assets with a determinable finite life (except for investment
properties), by allocating the value of the asset in the Balance Sheet over the periods expected to
benefit from their use according to the following policy:


Newly acquired assets with the exception of vehicles, plant and equipment are depreciated in
the year following acquisition and assets under construction are not depreciated until they are
used.
Newly acquired vehicles, plant and equipment are depreciated in the year of acquisition on a
pro-rata basis.
63
Depreciation is calculated on the following bases:



other buildings – straight line allocation over the life of the property as estimated by the valuer.
vehicles, plant and equipment – straight line allocation over the useful life of the asset as
advised by a suitably qualified officer.
freehold land and community assets are not depreciated.
Where an asset has major components with different estimated useful lives, these are depreciated
separately.
Revaluation gains are also depreciated, with an amount equal to the difference between current
value depreciation charged on assets and the depreciation that would have been chargeable
based on their historical cost being transferred each year from the Revaluation Reserve to the
Capital Adjustment Account.
Componentisation Policy
The Code of Practice on Local Authority Accounting requires each part of an item of property,
plant and equipment with a cost that is significant in relation to the total cost of the asset to be
depreciated separately. Where there is more than one significant part of the same asset which
have the same useful life and depreciation method, such parts may be grouped in determining the
depreciation charge. In practice this can be achieved by only separately accounting for significant
components that have different useful lives and/or depreciation methods. The requirement for
componentisation for depreciation purposes is applicable to enhancement and acquisition
expenditure incurred and revaluations carried out from 1 April 2010.
i.
Enhancement Expenditure
Only assets with an overall value of £1 million and over will be considered for componentisation.
To be separately identified as a component any enhancement expenditure must meet the
following criteria:

have a cost of at least 20% of the cost of the overall asset and

have a materially different useful life (at least 20% different) and

have a depreciation method that materially affects the amount charged
ii.
Derecognition
Where a component is replaced or restored and is being recognised as per this policy the carrying
amount of the old component will be derecognised. Where the carrying value of the
derecognised/replaced component is not known the authority will use the cost of the new
component as an indication of what the cost of the replaced component was at the time it was
acquired or constructed, adjusted for depreciation and impairment if required.
iii.
Valuations
The Authority’s Valuers have been instructed to carry out valuations on componentised basis.
Investment Property
Investment properties are those that are used solely to earn rentals and/or for capital appreciation.
The definition is not met if the property is used in any way to facilitate the delivery of services or
production of goods or is held for sale.
64
Investment properties are measured initially at cost and subsequently at fair value, based on the
amount at which the asset could be exchanged between knowledgeable parties at arm’s-length.
Investment Properties are not subject to depreciation. The Code of Practice on Local Authority
Accounting requires properties to be revalued annually according to market conditions at the yearend. However as the value of investment property held by GMFRA is small, the properties will be
revalued in line with the Authority’s 5 year rolling programme for land and buildings unless there is
evidence of a significant change in the market place.
Gains and losses on revaluation are posted to the Financing and Investment Income and
Expenditure line in the Comprehensive Income and Expenditure Statement. The same treatment
is applied to gains and losses on disposal.
Rentals received in relation to investment properties are credited to the Financing and Investment
Income line and result in a gain for the General Fund Balance. However, revaluation and disposal
gains and losses are not permitted by statutory arrangements to have an impact on the General
Fund Balance. The gains and losses are therefore reversed out of the General Fund Balance in
the Movement in Reserves Statement and posted to the Capital Adjustment Account and (for any
sale proceeds greater than £10,000) the Capital Receipts Reserve.
Private Finance Initiative (PFI)
PFI and similar contracts are agreements to receive services, where the responsibility for making
available the property, plant and equipment needed to provide the services passes to the PFI
contractor. As the Authority is deemed to control the services that are provided under its PFI
schemes, and as ownership of the property, plant and equipment will pass to the Authority at the
end of the contracts for no additional charge, the Authority carries the assets used under the
contracts on its Balance Sheet as part of Property, Plant and Equipment.
The original recognition of these assets at fair value (based on the cost to purchase the property,
plant and equipment) was balanced by the recognition of a liability for amounts due to the scheme
operator to pay for the capital investment.
Non current assets recognised on the Balance Sheet are revalued and depreciated in the same
way as property, plant and equipment owned by the Authority.
The amounts payable to the PFI operators each year are analysed into four elements:




fair value of the services received during the year – debited to the relevant service in the
Comprehensive Income and Expenditure Statement
finance cost – interest is charged on the outstanding Balance Sheet liability, debited to the
Financing and Investment Income and Expenditure line in the Comprehensive Income and
Expenditure Statement
payment towards liability – applied to write down the Balance Sheet liability towards the PFI
operator (the profile of write-downs is calculated using the same principles as for a finance
lease)
lifecycle replacement costs – proportion of the amounts payable is posted to the Balance
Sheet as a prepayment and then recognised as additions to Property, Plant and Equipment
when the relevant works are eventually carried out. (If the expenditure meets the relevant
criteria) or alternatively debited to the relevant service area in the Comprehensive Income and
Expenditure Statement.
VAT
VAT payable is included as an expense only to the extent that it is not recoverable from Her
Majesty’s Revenue and Customs. VAT receivable is excluded from income.
65
PENSION FUND ACCOUNT
2013/14
£’m
2014/15
£’m
2014/15
£'m
Contributions Receivable
From Employer:
-9.858
Contributions in relation to pensionable pay
-8.417
-6.246
From Employee
-6.135
-0.400
Ill Health Retirements
-0.186
-16.504
-0.146
-14.738
Transfers In from other Authorities
0.000
Benefits Payable
36.271
9.931
Pensions
Commutations and lump sum retirement benefits
46.202
37.198
7.712
44.910
Payments to and on account of leavers
0.625
30.177
-30.177
0.000
Individual Transfers out to other schemes
Sub Total: Net Amount Payable/Receivable for the year
before top-up grant receivable/payable to CLG
Top-up grant receivable
Net amount payable/receivable for the year
0.332
30.504
-30.504
0.000
NET ASSETS STATEMENT
2013/14
£’m
9.081
Pension Top-Up Grant receivable from CLG
6.668
-2.325
Creditor
-0.553
1.018
Debtor
0.420
0.267
Payment in Advance
-8.041
0.000
66
2014/15
£'m
Amount due to/from General Fund
-6.535
0.000
NOTES TO THE PENSION FUND ACCOUNT
Introduction
The funding arrangements for the Firefighters pension scheme in England changed on 1 April
2006. Before 1 April 2006 these schemes did not have a percentage of pensionable pay type of
employer’s contribution - rather each Authority was responsible for paying the pensions of its own
former employees on a pay as you go basis. Under the new arrangements the schemes remain
unfunded but Authorities will pay an employer’s pension contribution based on a percentage of
pay into the Pension Fund. Each Authority in England is required by legislation to operate a
Pension Fund and the amounts that must be paid into and out of the Fund are specified by
regulation under the Firefighters’ Pension Scheme (Amendment) (England) Order 2006.
Employees’ and employers’ contribution levels are based on percentages of pensionable pay set
nationally by the Department of Communities and Local Government (CLG) and subject to
triennial revaluation by the Government Actuary’s Department.
There are no investment assets and the fund is balanced to nil each year by receipt of pension
top-up grant from CLG or by paying over any surplus to CLG.
The fund’s financial statements do not take into account liabilities to pay pensions and other
benefits after the period end.
Accounting Policies
The accounting policies adopted for the production of the pension fund account are in line with
recommended practice and follow those that apply to the Authority’s primary statements.
The Net Assets statement does not include liabilities to pay pensions and other benefits after the
balance sheet date. Future liabilities are addressed under the application of IAS19 (See note 35).
Net Assets Statement
Included within this statement is the balance of £6.668m due from CLG for the 2014/15 Top-up
Grant. The majority of the debtors and creditors relate to additional employer and employee
pension contributions. These estimated additional contributions have been included following a
legal ruling which has resulted in certain allowances, that were previously non pensionable, now
becoming pensionable.
The Amount due from the General Fund is the reconciling amount to the Authority’s Balance
Sheet.
Since the year end a legal case has been settled in the favour of a firefighter in relation to the
calculation of his pension undertaken by the Government Actuaries Department (GAD).
CLG
have now confirmed that additional payments will be required to be made to retired firefighters on
a national basis. However, as the cost of pensions is fully funded by Communities for Local
Government, there should be no cost to the Authority.
67
STATEMENT OF RESPONSIBILITIES FOR THE STATEMENT OF ACCOUNTS
The Authority’s Responsibilities
The Authority is required:

to make arrangements for the proper administration of its financial affairs and to secure that
one of its officers has the responsibility for the administration of those affairs. In this
Authority, that officer is the Treasurer;

to manage its affairs to secure economic, efficient and effective use of resources and
safeguard its assets.
I confirm that these accounts were approved by the Audit, Scrutiny and Standards Committee at
the meeting held on xx September 2015.
Signed on behalf of the Greater Manchester Fire and Rescue Authority by the Chair of the Audit,
Scrutiny and Standards Committee approving the accounts:
Councillor
24 September 2015
The Treasurer’s Responsibilities
The Treasurer is responsible for the preparation of the Authority’s Statement of Accounts which,
in terms of the CIPFA/LASAAC Code of Practice on Local Authority Accounting in Great Britain
(“the Code of Practice”), is required to present fairly the financial position of the Authority at the
accounting date and its income and expenditure for the year ended 31 March 2015.
In preparing this Statement of Accounts, the Treasurer has:



selected suitable accounting policies and then applied them consistently;
made judgements and estimates that were reasonable and prudent;
complied with the Code of Practice.
The Treasurer has also:

kept proper accounting records which were up to date;

taken reasonable steps for the prevention and detection of fraud and other irregularities.
I certify that the responsibilities for the Statement present fairly the financial position on the
Greater Manchester Fire and Rescue Authority:
P McKevitt BA (Hons), ACMA & CGMA
Treasurer
24 September 2015
68
Sustainability Accounting and Reporting
Sustainable development is increasing in profile – the 2008 Climate Change Act set binding targets
for reducing CO2 emission and a UK-wide commitment to pursuing a sustainable agenda across
the whole public sector. Greenhouse gas emissions are now mandatory inclusions in the annual
director’s reports of UK quoted companies and HM Treasury now requires sustainability reporting
in the financial accounts of all government departments.
Within organisations ‘what gets measured gets managed’, so regular sustainability reporting
means that these important issues can be managed. For external stakeholders, sustainability
reporting is an opportunity to engage and hold organisations to account.
Greater Manchester Fire and Rescue Authority is committed to providing its service in a
sustainable manner that enables us to continue to work effectively within the communities we
serve.
GMFRS Sustainability Strategy
Since 2009 GMFRS has reduced its carbon footprint by 30%. Numerous invest to save projects
mean that annual utility bills are actually £0.267m lower. But this is set against a background of
dramatically increasing prices, so if we’d taken no action increased utility bills would have had an
additional cumulative cost of £6.2 million.
In April 2014 the Authority approved its second Sustainability Strategy which aims to move
GMFRS towards being a truly ‘net positive’ organisation – where rather than merely trying to
reduce our impact on the environment, we leave it in better shape than if we did not exist.
Given the scale of change required throughout society in the coming decades, the strategy targets
5 ambitious objectives, with a long-term timescale to 2050:
i. To avert more CO2 than we produce,
ii. To cause no waste,
iii. To avoid all unnecessary pollution from fire-fighting,
iv. To waste no water,
v. To remain leaders on sustainability.
To achieve these objectives, interim targets are set to 2020, ensuring the Authority remains on
track to achieve the longer term goals:
i. A 50% reduction in CO2 equivalent emissions vs. 2008/09
ii. A 25% reduction in total waste volume vs. 2008/09
iii. ‘Environmental salvage’ a daily part of fire-fighting
iv. Fully quantified cost and volume of water used operationally
v. All GMFRA employees trained in ‘carbon literacy’
The Strategy is built into the Corporate Plan through a new Development Goal:
Progress towards our vision of a net positive environmental impact.
Environmental Management System (EMS)
The EMS is the main tool used to understand how all GMFRS activities impact the environment
and to ensure full compliance with environmental legislation. It is certified to ISO14001, providing
external certification that we are taking active steps to continually improve our environmental
performance. In 2014 the auditor reported that:
69
“Greater Manchester Fire and Rescue Service can demonstrate excellent continuous
improvement with its core objectives which are firmly embedded in the organisations strategy of
improvement and change.”
Direct Impacts
Financial Performance - Investment
Financial investment has been made to support sustainability initiatives within the Authority, with
both capital and revenue commitments. Projects are prioritised based on projected energy, carbon
and cost saving to ensure value for money and paybacks within a 10 year timeframe.
Capital investment projects implemented over 2014/15:
Project
Location
Whole building LED
Lighting Swap Out
Drying Room
Dehumidifiers
Heating controls
Cost
(£000s)
50
Bolton Central
Payback
7 years
Various Sites
16
5 years
Leigh Technical Services
Centre
12
<2 years
Sustainability Capital Investment Summary- Expenditure 2014/15
2011/12
Actual
(£000s)
2012/13
Actual
(£000s)
2013/14
Actual
(£000s)
2014/15
Actual
(£000s)
0
0
46
0
47
189
656
100
0
34
1
0
223
10
713
10
110
Water Consumption &
Management
Energy Consumption
& Management
Waste & Recycling
Management
Travel
TOTAL
47
Income Generation
Solar panels now generate 12% of all electricity used by GMFRS. Government subsidies in the
form of Feed in Tariff are paid for every unit of energy generated by our solar panels. Coupled with
selling excess electricity to the national grid, a total income of £0.124m has been received in
2014/15.
A Partnership Grant of £0.010m has been secured from Transport for Greater Manchester to
install publicly accessible cycle repair stands at 15 fire stations.
Energy Data Management
The post of Sustainability Officer continues to carry out detailed analysis of energy and water data
and bills. This has led to £0.018m being reclaimed from utility companies this year.
70
Financial & Non-Financial Performance Summary
Measure
Electricity
Gas
Diesel
Water
Waste
Paper
kWh
£
kWh
£
Litres
£
m3
£
%
Recycled*
£
Sheets
£
2012/13
2013/14
2014/15
4,809,755
524,779
14,388,360
517,995
647,565
801,042
36,528
298,540
87
4,354,869
532,569
13,421,047
443,976
638,441
767,038
35,336
308,752
87
3,956,174
492,462
11,602,089
395,104
636,465
708,481
32,425
287,182
89
90,617
2,807,000
15,158
76,359
2,800,000
15,120
% Change
year on year
11.5%
5.3%
1.3%
8.2%
0%
60,081
2,455,000
12%
12,570
*Recycled = diverted from landfill through recycling and energy recovery
Water charges include fixed Water rates, and during 2013/14 there were refunds received from
previous periods of £0.045m which have been removed from the above figures for comparative
year on year purposes.
Please note that costs are based on actuals and may vary from the Statement of Accounts
accruals basis.
Electricity
The significant drop in electricity consumption over the year is largely due to first full summer since
the solar PV systems were installed.
Gas
Rochdale fire station has been built to high efficiency standards and has achieved an A+ rated
Display Energy Certificate, meaning that (in carbon terms) it generates more energy than it
consumes.
Diesel
Fuel consumption is 23% lower than in 2008/09. However, the cyclical nature of fleet replacement
means that consumption has plateaued over the last three years.
Waste
Only 10% of our waste now ends up in landfill. Most of the waste that cannot be recycled is
processed into refuse derived fuel. In total the Service generated 5% less waste than over the
previous 12 months.
Indirect Impacts
In addition to investments in proven cost and carbon-saving technology, we carry out other
initiatives at little to no cost, to further promote sustainability within the organisation and within the
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communities we serve. To engage with employees, drive innovation and improve efficiency across
the service we:
To avert more CO2 than we produce
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Following advice from the Carbon Trust, increased insulation was included in the
refurbishment of the Emergency Response Hub.
Re-roofing works at ten fire stations included improvements to thermal insulation.
Fire service houses received free loft insulation as part of a case study sponsorship with
the solar panel providers.
To cause no waste
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A new cheaper waste contract includes quarterly reporting and began with an audit to
ensure sites have the appropriate number and type of bin.
Food waste is now being collected from sites with canteens and used to generate
electricity through anaerobic digestion.
End of life computers are now recycled by Tier1 at Forest Bank prison. Not only does this
mean materials are recovered in the UK, but provides vital employment for inmates
contributing to more successful integration upon release.
The environmental performance of the new training site will be assessed using CEEQUAL
(Civil Engineering Environmental Quality Assessment), with predicted score of ‘Excellent’:
o
o
o
o
20% lower CO2 emissions than Part L building regulations
20% energy from renewables (for community building)
80% responsible material sourcing (local / reclaimed content)
95% construction waste diversion from landfill
To avoid all unnecessary pollution from fire fighting
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Training is underway for all crews to remind and inform of procedures and developments
regarding environmental protection at incidents (and hazardous materials).
New equipment and practices have been delivered to the specialist crews responsible for
the Environmental Protection Unit.
Pre-determined Attendance criteria have been revised to ensure Hazardous Materials
Environmental Protection Officers are mobilised to more incidents. HMEPOs now also
have electronic access electronic to detailed drainage maps.
The large waste depot fire at Duncan Street was one notable incident where crews
deployed techniques to recirculate fire water run-off back onto the blaze.
To waste no water
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A Sustainability Intern was employed to analyse detailed water use data collected by six
appliances over three years. This data was cross-mapped with incident and mapping data
to reveal some key facts that will feed into future firefighting and the review of fire
appliances. It should be noted that the sample size was too small to provide anything more
that indicative results. An example would be that currently appliances carry 1,800 litres of
water, but 82% of incidents require less than 500 litres to extinguish.
A rainwater harvesting systems has been installed at Irlam, which feeds a jet spray
specifically for vehicle washing.
Waterless urinals have been installed at headquarters, principally by one officer who made
the suggestion through the Green Ideas scheme and has seen the project through
business case and pilot to full roll out.
The introduction of the Ultra High Pressure Lances should see a reduction in the quantity
of water used at incidents.
To remain leaders on sustainability
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The Sustainability Strategy Sessions series continues to provide insight to Corporate
Leadership Team from sustainability leaders in the private sector. The speaker from BT
explained their ‘Net Good’ ambition, which aims to reduce carbon emissions by at least
three times the end-to-end carbon impact of the business. Other speakers this year
followed themes from the strategy with BAM Nuttall construction focussing on ‘greening’
organisational culture and United Utilities focussing on pollution and water.
GMFRS have been invited to represent the public sector on the Net Positive group. This is
an international collaboration aiming to shift corporate sustainability thinking away from
‘doing less harm’ towards ‘having an overall benefit beyond profit’ by encouraging others to
make Net Positive commitments. Other collaborators include Ikea, Dell, Cap Gemini and
BT. The group’s first findings and output will be launched in May 2015.
In collaboration with CL4RPs (a collaboration by 20 GM housing associations), an elearning package has been developed to be used as part of the Carbon Literacy training
for GMFRS employees.
A £0.010m grant from Transport for Greater Manchester has allowed them to pilot public
cycle repair stands at fifteen fire stations.
Recognition
The Authority continues to be seen as the sector and regional leader in sustainability and in
2014 scooped two awards. At the inaugural Manchester Evening News Environment Awards
GMFRS were named the city region’s Carbon Champions. The Service also won the North
West’s Green Heroes Sustainable Business (large companies) award, beating off competition
from Kelloggs and Walkers.
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GLOSSARY
A
Accruals
The concept that income and expenditure are recognised as they are earned or incurred, not as
money is received or paid.
B
Budget
A statement defining in financial terms the Authority's plans over a specified period. The budget is
prepared as part of the process of setting the precept.
C
Capital Adjustment Account
This provides a balancing mechanism between the different rates at which assets are depreciated
under the Code and are financed through the capital control system.
Capital Expenditure
Expenditure on the acquisition of non-current assets such as land, buildings, vehicles and
equipment which are of long term value, or expenditure which adds to and not merely maintains
the value of existing non-current assets.
Capital Financing Costs
Each service is charged with an annual capital charge to reflect the cost of fixed assets used in
the provision of services.
Capital Financing Requirements
This measures the underlying need to borrow to finance capital expenditure.
Capital Receipts
Money received from the sale of capital assets such as vehicles, which may be used to repay
outstanding debt or to finance new assets.
Commutation
This is where a member of the pension scheme gives up part of his/her pension in exchange for
an immediate lump sum payment.
Corporate and Democratic Core
The corporate and democratic core is concerned with the costs of corporate policy making and
member based activities. Other costs relate to the general running of the Authority including
corporate management, public accountability and treasury management.
Corporate Governance
This is concerned with the Authority’s accountability for the stewardship of resources, risk
management, and relationship with the community. It also encompasses policies on whistle
blowing, fraud and corruption.
Creditors
Amounts owed by the Authority for work done, goods received or services rendered but for which
payment has not been made at the balance sheet date.
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D
Debtors
Sums of money due to the Authority but unpaid at the balance sheet date.
Defined Benefit Pension Scheme
A defined benefit pension scheme is one where retirement benefits are determined independently
of the investments of the scheme and employers have obligations to make contributions where
assets are insufficient to meet employee benefits. The Local Government scheme is classified as
a defined benefit scheme. For these schemes the IAS19 requires recognition of the net
asset/liability and a pension reserve in the Balance sheet and transactions in the Income and
Expenditure Account for movements in the asset/liability.
Depreciation
The measure of the wearing out, consumption, or other reduction in the useful economic life of a
fixed asset, whether arising from use, passage of time or obsolescence through technological or
other changes.
F
Fair Value
This is the amount that an asset could be bought or sold for between parties; the current market
value of an asset can be evidence that the assets have been valued fairly.
Financial Instruments
This is any contract that gives rise to a financial asset of one entity and a financial liability or equity
of another. The term covers both financial assets (eg. loans receivable) and financial liabilities (eg.
borrowings).
Funded Pension Scheme
A funded pension scheme is one in which the future liabilities for pension benefits are provided for
by the accumulation of assets held externally to the employer's business. The Authority's
employees, with the exception of firefighters, are covered by such a scheme, which is managed
on its behalf by Tameside Metropolitan Borough Council. The firefighters’ scheme on the other
hand is unfunded.
I
International Financial Reporting Standards
These are the accounting standards that must be adopted from 2010/11 onwards.
Impairment
A reduction in the value of a fixed asset below its carrying amount on the balance sheet.
Intangible Assets
These are assets that have no physical substance, for example, the purchase of computer
software licences.
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M
Minimum Revenue Provision (MRP)
This is the minimum amount which must be set aside from revenue as provision for debt
repayment. For this Authority it is currently 4% of the internal and external debt outstanding at the
start of the year.
N
Net Book Value
The amount at which fixed assets are included in the balance sheet, i.e. their historical cost or
current cost less the cumulative depreciation.
Non Distributed Costs
Costs incurred by the Authority which are excluded from service costs these include past service
costs relating to changes in pension regulations, the costs associated with unused shares of I.T.
facilities and impairment losses relating to assets under construction.
P
Pension Account
The Fire and Rescue Authority is required to set up a separate fund from the rest of its operation
for transactions relating to firefighters pension arrangements. The Authority has a formal
responsibility for paying firefighters pensions. The fund is balanced to nil each year by the receipt
of a pensions top-up grant from the Department for Communities and Local Government.
Precept
An amount of money levied by one Authority (the precepting Authority) which is collected by
another Authority (the collecting Authority) as part of the council tax. The Fire Authority is the
precepting Authority and the Metropolitan District Authorities of Greater Manchester are the
collecting authorities.
Private Finance Initiative (PFI)
A partnership between the private and public sectors that uses private sector financing to provide
public sector assets. The partnership has to meet certain criteria to qualify for Central
Government subsidy.
Provision
An amount set aside to provide for a liability, which is likely to be
incurred, but the exact amount and the date on which it will arise is uncertain.
R
Reserves
A reserve is an amount set aside for a specific purpose in one financial year and carried forward to
meet expenditure in future years.
Revaluation Reserve
This reserve replaces the Fixed Asset Restatement Account (FARA). It contains revaluation gains
recognised since 1 April 2007 only, the date of its formal implementation from holding fixed assets.
Revenue Expenditure
This is the day to day running costs the Authority incurs in providing the service.
U
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Unfunded Pension Scheme
This is one in which liabilities for pension benefits are charged to the employer's revenue account
in the year in which they arise and are not financed from investments held. The Authority
operates such a scheme for its firefighters.
V
Voluntary Revenue Provision (VRP)
The VRP is a voluntary revenue contribution for the repayment of debt. It recognises the shorter
life span of a number of assets i.e. vehicles, that would become obsolete before the original debt
has been repaid.
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TERMS OF REFERENCE
REGULATORY BODIES, OTHER BODIES AND REGULATORY FRAMEWORK
C
CIPFA (Chartered Institute of Public Finance and Accountancy)
The leading professional body for public sector accounting which sets accounting standards for
the public sector. CIPFA advises central government and other bodies on local government and
public sector finance matters
http://www.cipfa.org
Communities and Local Government (CLG)
The Department of Communities and Local Government (CLG), issues government lead initiatives
on issues such as fire prevention, emergency planning and training. CLG is also a major funding
source.
https://www.gov.uk/government/organisations/department-for-communities-and-local-government
G
GMC (Greater Manchester (County) Council)
GMC was a strategic Authority running regional services such as transport, strategic planning,
emergency services and waste disposal. The GMC was abolished in 1986, with its responsibilities
being transferred between this fire Authority and other local authorities in Greater Manchester.
Government Actuary’s Department (GAD)
The Government Actuary’s Department was appointed on behalf of Greater Manchester Fire &
Rescue Service to assist with the assessment of accrued retirement benefit liabilities under the
Firefighters’ Pension Scheme 1992, the Firefighters’ Compensation Scheme 2006 and the New
Firefighters’ Pension Scheme 2006.
I
Integrated Risk Management Plan (IRMP)
This document sets out the Authority’s plans to reduce the risks from fires and other emergencies.
International Financial Reporting Standards (IFRS) - Code of Practice on Local Government
Accounting in the United Kingdom 2014/15:
These statements prescribe the methods by which all published accounts should be prepared and
presented and compliance is mandatory; any departure must be clearly disclosed within the
published accounts. The code incorporates these accounting standards to the extent that they
comply with specific legal requirements and are relevant to the activities of the Authority.
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L
Local Authority (Scotland) Accounts Advisory Committee (LASAAC)
Often working as a joint committee with CIPFA, LASAAC aims to develop and promote proper
accounting practice for Local Government in Scotland and contributes to the formal approval
process for the SORP and SERCOP.
http://www.cipfa.org.uk/scotland/technical/lasaac.cfm
M
Medium Term Financial Strategy (MTFS)
A five year financial plan which demonstrates a sound basis for its budgets and capital programme
which are designed.
P
Public Works Loan Board (PWLB)
This is a government agency which provides long-term loans to public bodies at better rates than
what would be obtained commercially.
http://www.dmo.gov.uk/index.aspx?page=PWLB/Introduction
R
Royal Institute of Chartered Surveyors (RICS)
Accrediting body for the surveying profession. Surveyors who value our properties must be RICS
accredited.
http://www.rics.org/
S
Service Reporting Code of Practice for Local Authorities (SeRCOP)
Published by CIPFA the SeRCOP establishes “proper practice” with regard to consistent financial
reporting to enhance the compatibility of local authority financial information and is given statutory
force in England by regulations under the Local Government Act 2003.
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GOVERNMENT FUNDING
N
Non Domestic Rate (NDR)
NNDR poundage is set annually by the government, collected by local authorities and then shared
between authorities and the government on a 50:50 basis.
New Dimensions Grant
Government funding to provide resources that will support advanced training, emergency planning
and the procurement of new equipment to enhance the fire service’s capability of responding to a
wider range of incidents.
R
Revenue Support Grant (RSG)
A government grant to aid local Authority services generally. It is based on the government’s
assessment of how much an Authority needs to spend in order to provide a standard level of
service
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NOTES
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